The CEO of Onex Corp. has indicated that the alternative asset manager is poised to pursue additional significant investments in the insurance sector following its recent collaboration with American International Group Inc. (AIG) on a major acquisition.
Toronto-based Onex and AIG announced last week that they would acquire stakes in Convex Group Ltd., a specialist property and casualty reinsurer, in a transaction valued at £7 billion. On completion of the deal, Onex will hold 63% of Convex on its own balance sheet, while AIG will own 35%. The two companies are purchasing the reinsurer from one of Onex’s private equity funds and co-investors.
Asked whether he envisions similar transactions in the future, Onex CEO Bobby Le Blanc responded affirmatively. He explained that Onex has the capacity to redeploy billions of pounds of capital from other assets on its balance sheet into additional “Convex-like” investments.
“I foresee this being a very concentrated effort – likely involving just one or two more deals,” Le Blanc stated during a conference call with analysts. “Insurance, of course, is a very natural area for us to explore, but there are also other sectors where we’ve had remarkable success over the years, and we’d be open to opportunities in those areas as well.”
As part of the Convex transaction, AIG has also agreed to purchase a 9.9% stake in Onex for approximately £646 million, in addition to committing £2 billion over three years to Onex’s investment funds.
For Onex, this deal marks a significant transformation and forms part of a broader restructuring plan that Le Blanc has been overseeing for several years. This strategy has involved reducing costs and exiting businesses such as wealth management firm Gluskin Sheff, while expanding Onex’s focus on credit investments.