The British secondary firm Coller Capital has formed Multiple Capital to handle its recently acquired venture portfolio of Societe Innovatech du Grand Montreal. It will be run by former Innovatech CEO Hubert Manseau, along with former Innovatech vice presidents Michel Lagueux and Andre Vaillant.
Multiple Capital’s first priority is managing the Innovatech assets to successful exits. This includes exiting some companies in the portfolio that are already public and focusing on the M&A market to find liquidity for the rest of the portfolio.
“We are mostly counting on sales and mergers,” Manseau says. “If ever the IPO market is there it will be the cherry on the sundae. It will help us, but we don’t count on that too much.”
Multiple Capital’s long-term strategy is to “attract and manage other foreign funds in Quebec,” Manseau says. He adds that it’s “highly probable” that Multiple Capital will seek to raise its own fund independently, but does not expect to do that for a couple of years.
The Quebec government announced almost a year ago that it would sell the portfolio of Innovatech Montreal. Quebec’s premier, Jean Charest, had vowed to severely restrict government subsidies for businesses, and the Quebec government froze all new publicly backed venture fund investments, though funds were able to make follow-on investments and make good on current commitments. Government subsidies had been a centerpiece of the Quebec venture capital industry and helped the province establish itself as the biotech hub of Canada.
Coller agreed to invest up to $162 million in the deal. Of that, $65 million went towards the purchase of the portfolio, which has more than 120 investments. Another $33 million was earmarked for committed follow-on investments and Coller pledged an additional $64 million.
The formation of Multiple Capital follows Coller Capital’s pattern of buying portfolios and spinning out those assets and the current management team as an independent firm. Coller’s purchase of $90 million in private equity assets from Dresdner Bank created Annex Capital (see PE Week, 11/27/04). Also, its purchase of the venture portfolio of Lucent Technologies produced New Venture Partners.