Onex’s ONCAP closes fourth mid-market fund on $1.1bn

ONCAP IV, which is about 40% larger than its predecessor fund raised in 2011, received a 44% commitment from Onex.

Canadian investment firm Onex Corporation’s mid-market private equity platform ONCAP has closed its latest fund, ONCAP IV, on $1.1 billion, the firm said in a statement on Tuesday.

The latest mid-market vehicle fundraised for just over two months before this first and final close, and received commitments from both returning and new investors.

The statement added that Toronto-based Onex was the largest limited partner in this fund, having committed $480 million, or nearly 44 percent, of the total amount raised. ONCAP and Onex professionals also committed “a meaningful” amount to the fund, it said.

Other LPs include the District of Columbia Retirement Board and the Houston Municipal Employees Pension System, according to each of their meeting agendas from October.

A US Securities and Exchange Commission filing from 7 November indicates ONCAP IV raised $1.08 billion from 75 investors through its main vehicle. Another SEC filing from the same date shows ONCAP IV had a parallel vehicle, ONCAP IV Select, which garnered $8 million in commitments from eight investors.

ONCAP IV’s predecessor, ONCAP III, closed on C$800 million ($776 million; €576 million) in September 2011. Onex committed C$280 million, or 35 percent, to the third mid-market vehicle, with the rest coming from third-party investors.

ONCAP III was 75 percent invested through seven acquisitions, as of 30 June, at which point it also had C$142 million of uncalled LP capital for future investments. It was generating a net internal rate of return of 18 percent as of that date, according to Onex’s second-quarter filing.

According to PEI data, ONCAP III received commitments from LPs such as the California State Teachers’ Retirement System, insurer Allstate Investments, fund of funds manager ATP Private Equity Partners and fellow Canadian entity Caisse de dépôt et placement du Québec.

ONCAP II, which raised C$574 million in 2006, marked a 22 percent net IRR as of 30 June, according to the firm’s second-quarter filing.

ONCAP IV will retain the firm’s mid-market strategy of investing about $50 million to $100 million of equity in small- and medium-sized businesses in Canada and the US, according to the statement.

Overall, ONCAP has made 21 platform acquisitions and more than 110 add-on acquisitions.

Founded in 1987, Onex, which also pursues larger-cap private equity and credit strategies, manages about $23 billion in assets. In addition to its headquarters, it also has offices in London, New York, and Englewood Cliffs, New Jersey.

A spokeswoman was not immediately available to comment.