Canada’s TriWest raises largest fund in firm’s history

  • Calgary-based firm raises $500 mln for Fund V
  • GP commits 10 pct to new fund
  • TriWest to write “slightly larger check sizes”

Cody Church, co-founder and senior managing director of TriWest, said Fund V was “substantially oversubscribed,” with commitments coming from a mix of new and existing LPs, most of them Canadian and U.S.-based institutional investors.

The Calgary-based firm’s general partners accounted for nearly 10 percent of total capital committed, which is high for a North American private equity firm, according to Buyouts Insider’s 2014-2015 PE/VC Partnership Agreements Study.

Fundraising wrapped up after five months. It is the largest fund raised in TriWest’s 17-year history, exceeding by 43 percent the $350 million secured by TriWest Capital Partners Fund IV LP (2012). As a result, the firm now manages $1.2 billion of committed capital.

Church said Fund V’s larger size will not change the firm’s long-standing investment focus.

“Five hundred million was as large as we could get and continue to stick with the market focus that we have observed since our founding,” he said.

TriWest typically partners with managers of companies with operating earnings/EBITDA in the range of $10 million to $50 million or higher. The firm focuses on a wide range of industries, including services, manufacturing and distribution. (It avoids natural resources, real estate and technology deals.)

Church said the additional fund capital will help TriWest “write slightly larger check sizes and undertake moderately more deals.”

The raising of Fund V was concurrent with an active period of deal making. TriWest made five new platform investments last year, including last September’s acquisition of Broda Group, a Saskatchewan-based provider of heavy construction services that was spun out of Stuart Olson.

TriWest also acquired a majority interest in movie exhibition chain Landmark Cinemas and invested in its asset purchase from Empire Theatres. Additionally, it led the buyout of NSCG Crane & Heavy Haul Corp, which has gone on to complete two add-on acquisitions.

On the exit front, TriWest sold three portfolio companies in 2014, the sales of which had a combined enterprise value of almost $1 billion, Church said.

TriWest’s recent investment activity was led by Fund IV, which is almost fully invested. Fund V will source new opportunities, which Church said will happen in a more challenging deal environment due to lower oil prices, which have broadly impacted the market in Western Canada.

“While TriWest Capital focuses on non-energy deal flow, we think it’s important to be cautious in where and how we deploy capital at the moment,” he said. “We nonetheless believe there are acquisition opportunities available and some great companies that will need capital.”

Church helped launch TriWest in 1998 after working at EXOR America, a U.S.-based private equity firm. His fellow co-founders, Senior Managing Director Lorne Jacobson and Senior Advisor Ron Jackson, were top executives at Canadian food conglomerate Burns Foods prior to its sale in 1997.

Over the years, the firm has expanded with such senior hires as Jeff Belford, formerly the CFO of Swiss Water Decaffeinated CoffeeMick MacBean, formerly the CEO of Diamond Energy Services; and Norm Rokosh, who has headed a number of businesses, including Stuart Olson.

With Fund V’s final close, TriWest also promoted several team members, including Jon Spencer, who is now a a principal, and Dave Connolly, who is now a vice president. Church said the firm will also be hiring analytical staff in the months ahead.