Vertu Capital, Canada’s first non-public fairness agency based by a lady, has closed its inaugural fund, elevating $300-million to purchase software program firms.
Lisa Melchior, managing companion and founding father of Vertu, mentioned the agency accomplished fundraising on Worldwide Girls’s Day on March 8, which “was symbolic and significant for me, being the primary girl in Canada to start out a non-public fairness fund.”
Vertu’s buyers embody New York State Frequent Retirement Fund, BMO Capital Companions and funds managed by BMO World Asset Administration, Canadian Imperial Financial institution of Commerce, Enterprise Improvement Financial institution of Canada and Export Improvement Corp.
Ms. Melchior beforehand spent 17 years with the Ontario Municipal Staff Retirement System overseeing the pension large’s non-public capital investments within the expertise sector. Her declare to fame was main OMERS’ funding into Constellation Software program Inc., now Canada’s second-most helpful software program firm. She additionally led the privatization of Quebec software program firm Logibec in 2010 and subsequent spinout of its U.S. subsidiary MatrixCare. OMERS bought the Canadian operations of Logibec in 2015.
She left to start out Vertu Capital in 2017 and recruited companions Kim Davis, former chief monetary officer with TorQuest Companions, and Gil Nayot, beforehand a senior principal with Canada Pension Plan Funding Board’s non-public fairness group. Ms. Melchior believed there was an absence of capital to assist Canadian expertise firms that had achieved preliminary success and confronted a scarcity of funding choices domestically.
“We’re happy to be concerned in Vertu’s ongoing development story,” mentioned Colin Ryan, managing director and head of tech expertise and innovation funding banking with CIBC. “Vertu has a robust monitor file for productive investments within the expertise sector and a high-quality administration staff, and we sit up for persevering with our relationship with them.”
Vertu purchased two firms in 2019 in partnership with BDC Capital funded by particular goal automobiles: digital knowledge room supplier Firmex and digital funds firm Carta Options Holding Corp. They bought each firms in 2021, the identical 12 months Vertu started elevating its fund.
Ms. Melchior mentioned Vertu is seeking to purchase software program or software-enabled firms centered on enterprise clients with round $20-million of annual income and that are breaking even or worthwhile. Vertu goals to take a position $25-million to $75-million per deal for firms price as much as $500 million and double or triple the dimensions of companies earlier than promoting them. Vertu goals to do six to eight offers via the fund
Alison Nankivell, senior vice-president of fund investments with BDC Capital, mentioned Vertu fills an “attention-grabbing market area of interest that hasn’t been effectively addressed.” “It’s an amazing achievement that she’s discovered a core of buyers who’re ready to help her as a brand new franchise and meet a big market want.”
Vertu working adviser Jason Smith praised Ms. Melchior, who he recruited to the board of Actual Issues previous to its 2017 preliminary public providing when he was chief govt officer. He described her as a low-key, clever however modest investor with integrity and who “understands entrepreneurs. She’s a kindred spirit with unimaginable instincts who is aware of what it takes to construct a realistic, Canadian-style development firm.”
Ms. Melchior mentioned this is a perfect time to be launching a fund, 16 months after the beginning of a pointy downturn within the expertise house spurred on by rising inflation and rates of interest, which has resulted in a crash in valuations for software program and different expertise firms.
“We’re enthusiastic about having recent capital presently,” she mentioned. “Because the market has corrected, the deal-making atmosphere has been gradual to regulate. However it can, it’s inevitable, and the fallout of the collapse of Silicon Valley Financial institution will speed up it from right here ahead.”
Editor’s be aware: Vertu Capital invests between $25-million and $75-million per firm in enterprises price $500-million or much less. Incorrect figures in an earlier model of this story have been corrected.