Funds: Novacap Industries III LP and Novacap Technologies Buyout III LP
Targets: C$440M for Industries III; C$250M for Technologies Buyout III
Amounts Raised: C$400M for Industries III; C$160M for Technologies Buyout III
The 27-year-old Novacap, based in Longueuil, Quebec, and investing largely in Canada and the United States, is one of several indigenous firms, including
Novacap this spring held a first closing of C$400 million on
Novacap, which aims to generate at least a 25 percent net IRR for its backers, last raised a single industrial and technology fund of C$210 million in 2000. It went on to buy nine industrial companies and to make nine investments in technology companies—largely a mix of early-stage and later-round venture investments, according to our source. It has scored two exits from that fund, both Canadian companies: Santé Naturelle, a maker of vitamins, supplements and other health products, and SNOC, a maker of outdoor lighting fixtures. The firm requires its portfolio companies to have their headquarters within a three-hour travel distance of Montreal, but it considers making add-on investments in the United States and elsewhere.
The firm decided to split the latest fund into two partnerships to cater to the large U.S. and European investors it hoped to attract this time out; several told the firm they preferred to control how much money they allocated to Novacap’s two investment strategies. With Fund III, Novacap also decided to downplay early-stage deals for later-stage venture, growth equity and technology buyouts—closer to the strategy it followed with the evergreen fund it managed from its launch in 1981 to 1999. Doing so takes advantage of the backgrounds of the five-partner technology team led by Managing Partner Marc Beauchamp; all of them have experience helping to run mature technology companies. Novacap’s industrial team includes four partners led by Managing Partner Jean-Pierre Chartrand.
The firm has seven active industrial companies in its portfolio, including Demers Ambulances, a maker of ambulances, and LEK Inc., a maker of antiperspirant, deodorant, hair and skin care products. Both companies are based in Canada. The six still-active technology companies in its portfolio include ViXS Systems, a Canadian fabless semiconductor company. Reach Novacap at 450-651-5000.—D.T.