Onex Corp seeks $750 million for new transportation fund amid challenging private equity climate. Led by Wes Dick, a former senior executive at BBAM LLC, the fund aims for a 12% net internal rate of return.
The fund size may be adjusted based on investor demand. Onex plans to invest in middle market transportation businesses, focusing on aviation, road, rail, maritime, and intermodal sectors in North America and Europe. The buyout industry faces difficulties due to increased interest rates and banks’ reluctance to lend.
Onex paused fundraising for its flagship buyout fund earlier this year but now sees an opportunity to leverage its expertise in the transportation sector. Notably, Onex has made significant investments in various transportation companies, including WestJet Airlines Ltd and Sunwing Airlines.
The firm anticipates a first close for Onex Transportation Partners in the first half of this year. As part of cost reduction efforts, Onex has made organizational changes, withdrawing from private wealth management and allowing some employees to join Royal Bank of Canada.