Glen Silvestri, a former Ontario Teachers’ Pension Plan executive, launched the inaugural fund of his new shop called Sage Capital.
Toronto-based Sage, a search fund investor formed by Silvestri and Jon Piurko, set a $35 million target and $40 million hard cap for Sage Capital Fund I. It is expected to raise up to 70 percent of the target in a first close in the next few weeks, Managing Partners Piurko and Silvestri told Buyouts.
Fund I’s early limited partners are mostly family offices, institutions and wealthy investors. They include BMO Capital Partners, Forum Equity Partners and Mattamy Asset Management.
Sage will invest mostly in high-growth Canadian businesses facing successions and other significant ownership changes. It is expected that most of the firm’s deals will follow the traditional search fund model of financing young entrepreneurs looking to buy and build such companies.
In addition, Sage will invest in mid-career executives interested in stepping away from their existing jobs to buy succession-challenged companies focused on growth through acquisitions. Silvestri calls this approach “searching by a different name.”
In both cases, “injecting new blood” into mature businesses is key, Silvestri said. Sage’s strategy will also support retiring CEOs, Piurko said, who along with limited liquidity options “don’t usually have access to experienced operators who can step into their shoes.”
Sage will make control and minority investments, taking stakes of 20 percent to 60 percent and holding board seats. It will be active in post-acquisition operations, sharing networks and other resources with management teams. The firm will partner with other search fund investors, including U.S. vehicles seeking opportunities in Canada.
Silvestri became interested in search fund investing at Ontario Teachers’, where he worked for 13 years in the PE group, heading the telecom, media and tech and energy and power divisions, and chairing the investment committee.
“The space is nichey, especially in Canada where search fund investing is nascent, and one where I felt I could make a difference,” Silvestri said.
Silvestri left Ontario Teachers’ in 2014 to join Imperial Capital Group as a partner. Four years later, he decided to try his hand as a search fund investor with Piurko, CEO of Monarch Bridge Financial, a provider of small business financing and succession specialist. Piurko previously was a managing director in the PE group of Northwater Capital Management.
Sage has already made two investments, including Hathorn, a Toronto-based maker of sewer video inspection equipment. It partnered in the August deal with Robert Luck of Crescent Park Capital, who now leads Hathorn.
The other is Voxco, a Montreal-based software company focused on survey data collection and design. In June, Sage joined other investors backing the acquisition of Voxco by Pivoton Capital’s Sumit Aneja, now the company’s CEO.
The deals were capitalized by Piurko and Silvestri and will be rolled into Fund I when it closes. Sage is now exploring a third investment.