June 3, 2014 / 8:49 PM / 4 years ago

Onex says to drive credit AUM to $10 bln by 2017

TORONTO, June 3 (Reuters) - Onex Corp’s credit wing plans to triple its assets under management to $10 billion by the end of 2017 from last year, driven by rapid expansion of collateralized loan obligations (CLO) in the United States and Europe, the head of the unit said on Tuesday.

Speaking at an investor presentation in Toronto, Onex Credit Partners Chief Executive Officer Michael Gelblat said the 2017 AUM growth target was up from the target of $5 billion it gave in 2012.

AUM was at $3.3 billion at the end of 2013, compared with $1.5 billion at the end of 2011, and has grown ahead of the company’s expectations, he said.

“We did this almost entirely through the very successful build out of our CLO business,” said Gelblat. “There’s no doubt that the market has generally been receptive to CLO issuance over the past two years.”

Collateralized loan obligations are debt-backed securities that pool together loan payments and divide them up into different tranches.

The company plans to continue to expand its U.S. CLO business and expects to launch a European CLO platform this year.

Gelblat said credit is going to become a proportionally larger part of Onex, which is better known as a private equity firm.

The company’s shares rose 35 Canadian cents to C$67.63. (Reporting by Cameron French; Editing by Lisa Shumaker)

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