Sagard Holdings, a subsidiary of Energy Corp., has US$260 million in commitments for a brand new fund that can present credit score capital to mid-market firms in Canada and america.
An exterior capital elevate, a primary for Sagard Holdings in Canada, drew commitments from the Healthcare of Ontario Pension Plan (HOOPP), Montreal-based personal funding agency Walter Monetary and BRK Capital, the one household workplace of a Montreal entrepreneur. A big company pension plan has additionally dedicated, however Sagard officers mentioned they may not determine that investor by title.
Adam Vigna, managing companion and chief funding officer of Sagard Holdings and the brand new fund, Sagard Credit score Companions LP (SCP), mentioned the fund will likely be “agnostic” with regards to sector. However the main focus will likely be on lending to family-owned and founder-owned firms, in addition to small public firms.
Founder’s Benefit Capital
The fund will likely be kicked off with a primary funding transferred to SCP from Sagard Holdings. The $42 million senior secured credit score facility to Calgary-based Founder’s Benefit Capital Corp. closed final Could.
Vigna, who joined Sagard simply over a yr in the past after almost eight years with the Canada Pension Plan Funding Board, mentioned he and members of Energy Corp.’s Desmarais household believed the brand new fund would have broad enchantment for exterior Canadian institutional traders due to the promote it intends to serve and the potential returns from a mixture of conventional curiosity funds and costs, in addition to an fairness part reminiscent of warrants.
They anticipated the fund to submit annualized web returns of 10 to 12 per cent.
“We predict it’s an underserved area of interest, an underserved market,” Vigna mentioned, noting that the technique wouldn’t put Sagard in segments of the market served by banks, massive pensions reminiscent of CPPIB, or personal fairness sponsors.
Jim Walker, managing companion of HOOPP Capital Companions, mentioned the healthcare pension is collaborating in Sagard Credit score Companions LP due to a “compelling” mixture of the fund’s workforce and technique throughout the community of Sagard and Energy Corp.
Sagard Credit score Companions LP (SCP) is focusing on complete commitments of US$500 million by the tip of 2018.
In an interview this week, Vigna, 38, mentioned it was a troublesome choice to depart CPPIB, the place he ran the worldwide principal credit score investments group. However he mentioned he “couldn’t move up” the chance to work on new ventures with the Desmarais household.
Greater than 225 transactions have been checked out since January of 2017, with half of these in Canada, mentioned Vigna, who labored at Goldman Sachs in New York and Toronto earlier than becoming a member of CPPIB.
One member of his workforce at Sagard labored with him at each earlier employers, whereas one other two labored with him at CPPIB.