Onex buys GK Capital stake, turns it into new investing platform to buy undervalued credit securities

By Devika Patel

Knoxville, Tenn., Nov. 2 - Onex Corp. announced in a press release that it has established Onex Credit Partners, a credit-investing platform, to generate attractive risk-adjusted returns by buying undervalued credit securities.

The release said Onex Credit Partners plans a new initiative to acquire senior secured leveraged loans in order to take advantage of the current dislocation in the credit markets.

Onex Credit Partners will be led by Michael Gelblat and Stuart Kovensky, co-founders of GK Capital.

Before they founded GK Capital in 2005, Gelblat and Kovensky were co-managers of the Levco debt opportunity fund. Together they have experienced only eight down months since inception in July 2001 and consistently outperform benchmark indexes, Onex said in the release.

Onex has acquired a 50% interest in GK Capital, which has approximately $300 million in assets, and has renamed it Onex Credit Partners. The firm will retain the entire GK Capital team. Additionally, Onex has agreed to invest another $50 million in Onex Credit Partners.

"This partnership provides Onex with an excellent opportunity to build a substantial credit investing platform," Onex managing director Andrew J. Sheiner said in the release. "Michael and Stuart are experienced, have a great track record and team and apply the same kind of rigorous value analysis that has been a hallmark of Onex for 24 years."

"We share Onex's investing philosophy and commitment to excellence," Kovensky added, "and believe that there are significant synergies between the expertise of our team and Onex' private equity professionals that will benefit the entire organization, and our investors."

Based in Toronto, Onex makes equity investments in a variety of industries, including electronics manufacturing services, aerostructures manufacturing, healthcare, financial services, theatre exhibition, customer management services, personal care products and communications infrastructure.

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