Sagard Holdings secured $650 million in the first close of a second credit offering led by former members of Canada Pension Plan Investment Board’s private debt group.
Sagard Credit Partners II, an investor in non-sponsored credit opportunities in North America, was backed by 10 new and returning limited partners, according to a statement. They include anchor investor Healthcare of Ontario Pension Plan.
Initial commitments put Fund II more than halfway toward a $1.1 billion target. The hard cap is $1.3 billion. The fund is already 17 percent larger than Sagard’s inaugural credit pool, closed in December 2018 at $557 million.
Sagard is the multi-strategy investment arm of Power Corp, a listed holding company controlled by Canada’s billionaire Desmarais family. Paul Desmarais III is Sagard’s chairman and CEO.
Sagard launched the credit strategy three years ago under the leadership of managing partner and CIO Adam Vigna, formerly the head of CPPIB’s global principal credit investments. Vigna populated his team with other CPPIB veterans, including partner and portfolio manager Mustafa Humayun. In fact, more than half the team consists of ex-CPPIB professionals.
The strategy is focused on direct lending to North American private or public mid-market companies with EBITDA of $10 million to $50 million, according to Sagard’s website. The credit team provides or anchors debt financings of $10 million to $150 million to back a range of transactions, including acquisitions, refinancings, recaps and growth. Its activity is industry agnostic.
Fund II’s predecessor, more than 85 percent deployed, was targeting a 10 percent to 12 percent net return, Buyouts reported in 2018.
In the statement, Sagard said economic dislocation caused by the covid-19 pandemic is resulting in a larger and improved opportunity set for private debt in 2021 and beyond. Fund II will target “healthy businesses seeking liquidity to navigate the current uncertainty.”
Sagard has been in growth mode since its founding in 2005, especially in recent years. Along with the credit platform, it has a private equity platform that includes a European mid-market team. It also sponsors two tech venture capital pools. Last year, Sagard unveiled a healthcare royalties strategy led by partner and head David MacNaughtan, another CPPIB alumnus.
With the sophomore credit offering’s first close, Sagard’s cross-platform assets total nearly $5 billion, Desmarais said in the statement.
Sagard operates from offices in New York, Toronto, Montreal and Paris. Its leadership includes managing partner and president Samuel Robinson, previously a long-time executive with Goldman Sachs. Jonathan Tétrault, the former president and COO of Cirque du Soleil, joined in February as managing partner.
Action item: You can reach Sagard Holdings in New York at (212) 380-5605.