Jason New, co-COE and co-head of opportunistic credit at Onex Credit Partners, outside the company's offices in New York, the US, June 21 2021. Picture: AMIR HAJMA/BLOOMBERG
“If you believe we’re going to be in a relatively low risk-free rate environment for a prolonged period of time, people need yield in the marketplace, and the illiquidity premium you get in private credit is very attractive,” New said in an interview. “Both institutional and retail clients want that.”
New acknowledges there is already a lot of dry powder in private credit, but says there is also strong demand from borrowers as the economy recovers from the Covid-19 pandemic. Some firms need money to ramp up capacity again, and the pipeline for mergers, acquisitions and leveraged buyouts continues to be quite robust, he said, a wellspring of potential credit business.
Onex, the parent company, oversees $45bn in assets, about $7.2bn of which is its own shareholder capital. The Toronto-based firm has offices in New York, New Jersey, Boston and London. Last year, the firm acquired private debt shop Falcon Investment Advisors to help expand its alternative credit investing, creating a platform called Onex Falcon. Traditionally a mezzanine business, New plans to expand it into first-lien and unitranche lending, which blends multiple loans into a single facility.