Canadian Shop With Taste For Gambling Nears C$400M Target

Firm: Clairvest Group Inc.

Fund: Clairvest Equity Partners IV

Target: C$400 million

Placement Agent: NovaFund Advisors

Toronto-based merchant bank Clairvest Group Inc. is well on its way to reaching its C$400 million ($390 million) target for its fourth fund, already raising at least C$347 million, according to a report on the firm’s Web site. The hard cap for the fund is C$500 million

Clairvest Group, a public company founded in 1987, has continued to carve out a niche for itself as a specialist in investing in casinos. In April, the firm invested $72 million for a 40 percent stake in Midwest Gaming Holdings LLC, which is building a casino in Des Plaines, Ill. The casino, located approximately one mile from O’Hare International Airport, is expected to open in the summer of 2011.

Clairvest Group first invested in the casino sector in 2000 through Gateway Casinos, a casino operator in western Canada that generated 9.1x the firm’s invested capital when it exited the holding in 2007. Clairvest Group’s portfolio currently includes Casino Marina Del Sol in Concepcion, Chile, which re-opened in June after suffering damage in a devastating February earthquake; and Casino New Brunswick in New Brunswick, Canada.

The firm makes equity investments of around C$15 million to C$40 million in companies generating EBITDA between C$5 million and C$40 million. The firm prefers to take ownership positions of 20 percent to 80 percent, and invests across a variety of industries. It prefers companies with experienced managers and prospects for growth through internal expansion and add-on acquisitions.

Clairvest Group, which typically invests 50 percent of its funds in Canadian assets and 50 percent in U.S. assets, is seeking U.S. investors for the first time with Fund IV. An executive at the firm declined to comment on whether that effort has been successful.

Previous investors in Clairvest Group’s funds included the Canada Pension Plan Investment Board and Citi Private Equity.