Credit | Onex

Our Credit business includes a broad spectrum of private credit, public credit and public equity investing strategies that are managed by the Onex Credit team. Credit has $25.3 billion in assets under management, of which $712 million is Onex’ own investing capital. The Credit team has a successful track record of executing a disciplined approach to investing with a focus on capital preservation and strong risk-adjusted returns through cycles. The platform practices value-oriented investing, employing a rigorous bottom-up, fundamental and structural analysis of the underlying borrowers, coupled with active portfolio management, to continually seek to optimize portfolio positioning. Credit’s sourcing capabilities and data intelligence help to better inform investment decisions and dynamically manage portfolios in varying market conditions.

With a team of approximately 90 investment professionals, including about 20 portfolio managers, we are able to research and invest in a diverse set of public and private alternative credit investments that provide various income and return options to our investors.

Credit Team

Competitive Advantages

With a disciplined approach to investing and a focus on capital preservation, Credit has earned investor confidence and grown rapidly. Our credit platform benefits from a deep and seasoned team with experience investing across multiple market cycles and economic environments. Credit has access to vast industry expertise among Onex’ private equity professionals and enjoys a sharing of knowledge and experience among all investment teams. With the resources of a large institution and an integrated platform, we believe our investment strategies benefit from robust sourcing options and an analytical edge.

In addition, the Credit team enjoys the benefit of being part of a well-capitalized sponsor. Onex and the team are well-aligned as significant investors in all of our strategies.

Strategies

Our strategies target investments in tradeable, private and opportunistic credit as well as actively managed public equity and public credit funds that offer a broad risk/return profile for our investor base. Across the firm, we offer our investors a variety of strategies that invest in diversified portfolios of credits throughout an issuer’s capital structure to meet their specific return objectives.

Alternative & Private Credit	Structured Credit	COLLATERALIZED LOAN OBLIGATION STRATEGY (CLOs) Collateralized Loan Obligations (“CLOs”) are leveraged structured vehicles that hold a widely diversified asset portfolio funded through the issuance of long-term debt in a series of rated tranches of secured notes and equity. Onex launched its CLO platform in 2012 and has issued a total of 29 U.S. and European CLOs as of September 30, 2022. STRUCTURED CREDIT We seek to generate attractive risk-adjusted returns with some downside protection and current income (vehicle dependent) across the entire CLO capital structure from equity to investment grade notes. Target investment opportunities are CLOs, CBOs and related structured transactions.
	Opportunistic Credit	OPPORTUNISTIC CREDIT A flexible “all-weather” mandate that can tactically shift between private/originated transactions and secondary trading opportunities depending upon the market backdrop. This strategy is unconstrained by ratings, asset class or liquidity as it pursues attractive risk-adjusted returns. We seek to employ an active “drive-the-outcome” approach, rather than a passive value investing approach, while being focused on downside protection, upside optionality and an identifiable path to deliver value.
	Junior Capital & Direct Lending	JUNIOR CAPITAL Onex Falcon’s flagship strategy, Onex Falcon Private Credit Opportunities, provides high-value junior capital solutions to lower middle-market companies primarily in the U.S. and selectively in Canada and Europe. Actively seeks to invest in a wide variety of transaction types, which in addition to buyouts includes refinancings, recapitalization and growth financings. DIRECT LENDING This strategy provides high value senior credit solutions to lower middle-market companies primarily in North America. The strategy seeks to deliver current income and capital appreciation through OID by targeting high-value unitranche opportunities with favorable risk-adjusted returns.
Liquid Credit & Public Strategies	Sub-Investment Grade Liquid Credit	HIGH YIELD The High Yield Credit Strategy is focused primarily on investing in bonds that are rated below investment grade. This strategy seeks to generate attractive risk-adjusted returns that outperform the ICE BoAML US HY Index through a full credit cycle. The strategy aims to preserve capital by avoiding credit defaults and dampen volatility by dynamic positioning in response to market conditions. SENIOR CREDIT Senior Credit is a long only strategy focused on first-lien, senior secured debt obligations of North American borrowers in the broadly syndicated leveraged loan market. The strategy employs a fundamental, bottom-up credit selection process designed to deliver high income while minimizing credit default loss and interest rate risks, and can be deployed both with or without the use of leverage.
	Investment Grade Credit & Equities	FIXED INCOME & CREDIT ALTERNATIVE Our fixed income and credit alternative strategies are focused on generating absolute returns with low correlations to markets, primarily through exposure to the investment grade credit asset class. Our flagship investment grade strategy, Blair Franklin, is a long/short strategy that utilizes leverage and active trading to generate returns, while seeking to minimize duration risk. Other strategies include a short-duration, highly liquid bond strategy. We actively manage credit and geographic exposures within these strategies. PUBLIC EQUITY Bottom-up research and a thorough assessment of a company and its management help drive investment decisions within our public equity strategies. We look for companies with long term growth and stability, a proven track record, shareholder-minded management and a share price that is trading below our estimate of intrinsic value. We offer various strategies focused on providing different income and return profiles across all market caps and geographies.

Insights

Chad Valerio, Managing Director, Head of Opportunistic Credit and Portfolio Manager, shares the benefits of opportunistic investing.

June 2022

Chad Valerio, Managing Director, Head of Opportunistic Credit and Portfolio Manager, discusses opportunistic credit and what’s driving growth in the asset class.

January 2022

Chad Valerio, Managing Director, Head of Opportunistic Credit and Portfolio Manager, shared his perspectives on the private credit market.

July 2021