Good Timing For Canadian Shop Eyeing $550M

Firm:TorQuest Partners Inc.

Fund: TorQuest Partners Fund III LP

Target: C$550 million

Placement Agent: Greenhill & Co.

TorQuest Partners Inc., a Toronto-based firm that targets mid-market buyouts in Canada, is in the early stages of raising its third fund, a source familiar with the fundraising effort told Buyouts.

TorQuest is hoping to raise C$550 million ($554 million), an identical amount raised for its previous fund in 2006. The firm’s timing is ripe. The second quarter was the most active period for Canada’s buyout firms since the fourth quarter of 2008, with total investments of C$5.7 billion, a 40 percent rise from last year, The Wall Street Journal reported Aug. 18.

TorQuest targets mid-market buyouts in a variety of sectors, typically investing C$50 million of equity. About 60 percent of its investments are in the industrial/energy sector, and about 32 percent are in the medical/health arena, according to Thomson One. It is currently speaking with existing investors about backing the firm’s latest fund. Previous investors have included MassPRIM, Kensington Capital Partners Ltd, Ontario Teachers’ Pension Plan and Teachers’ Private Capital, according to Capital IQ.

TorQuest will probably formally launch the fundraise in September or October, and would hope to wrap by the end of the first quarter of 2012, the source said.

Founded in 2002, TorQuest manages C$700 million of equity. Its 12-person investment team is led by Senior Managing Partner Brent Belzberg, who in 1992 founded Harrowston Inc., a publicly traded investment fund that he sold in 2001 to Toronto-Dominion Bank’s private equity group.

TorQuest’s portfolio includes 4Refuel, a provider of fuel management and on-site fuelling services for businesses and government; FirstOnSite Restoration, a disaster restoration company; and Pinova Holdings, a company that manufactures specialty chemical products from pine trees and citrus fruit peels.

Executives at the firm were not immediately available for comment.