(Bloomberg) -- Onex Corp. is seeking $750 million for a new fund dedicated to transportation investments, people familiar with the matter said, a test of its ability to raise money in a tough climate for private equity. 

The Toronto-based firm has hired eight people for the fund, led by Wes Dick, a former senior executive at aircraft leasing firm BBAM LLC. Onex is targeting a 12% net internal rate of return, said one person, who asked to remain anonymous due to the confidentiality of the matter. 

The fund size may change depending on investor demand, said another person. A spokesperson for Onex declined to comment. 

Onex announced its plans last year to launch a strategy that targets middle market transportation businesses — looking for investments in the aviation, road, rail, maritime and intermodal sectors, primarily in North America and Europe.

The buyout industry is contending with the toughest funding environment since the 2008 financial crisis, partly because of the spike in interest rates and banks’ reluctance to lend. Apollo Global Management Inc. dialed back its fundraising goals for its flagship private equity fund, and Cinven Ltd. has extended the deadline for its eighth flagship fund, Bloomberg News previously reported. 

Onex has been affected by the turmoil, and chose to pause fundraising for its flagship buyout fund amid tough market conditions earlier this year. 

The transportation fund gives the firm a chance to tout its long history in the sector. One of founder Gerry Schwartz’s most famous takeover plays came in 1999, when he tried to consolidate the country’s airline industry by forcing Air Canada together with financially-struggling Canadian Airlines. 

That bid failed, but 20 years later Onex bought control of Air Canada’s main domestic rival, WestJet Airlines Ltd., then added to it with the acquisition of low-cost carrier Sunwing Airlines announced last year. It’s also been an investor in BBAM, Spirit AeroSystems and Hawker Beechcraft. 

In November, Chief Executive Officer Bobby Le Blanc told analysts that Onex Transportation Partners expected a first close in the first half of this year. 

Read More: Onex to Cut Costs as It Stops Raising Money for Flagship Fund

Onex, which manages $51 billion of assets, has been making changes to reduce costs. It walked away from a division that offered private wealth management to affluent individual investors, allowing some of those employees to depart for Royal Bank of Canada. 

In May, Schwartz stepped down as CEO, handing the reins to Le Blanc.

Read More: Buyout Pioneer Schwartz Clings to Power as Pressure Rises

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