The Canadian Business Growth Fund has announced the official launch of its fund.
Created by a group of Canadian banks and insurance companies, the Canadian Business Growth Fund is an independent investment fund that has made an initial capital commitment of $545 million, with plans to increase its commitment to $1 billion in future years.
When the fund was announced in March, the CBGF said it would likely have an initial capital commitment of $500 million, with the potential to increase it to $1 billion over 10 years depending on demand and fund performance.
The Canadian Business Growth Fund will invest between $3 million and $20 million in mid-market companies with $5 million or more in annual revenue, a demonstrated growth trajectory, and a vision for accelerated growth. In a statement to BetaKit, CEO George Rossolatos said that there is no set time frame to invest the capital. “We will reinvest proceeds of exited investments and possibly increase the size of the pool over time and as a result the pace of executing investments,” he said.
The fund is seeking Canadian companies with “patient, minority capital” to finance continued growth and help scale existing operations. The fund will also provide advice about business growth strategies and corporate finance, and also facilitate a talent pool to help entrepreneurs expand their businesses.
“Our goal is to help entrepreneurs scale up their mid-market businesses as a patient, minority capital partner.”
– George Rossolatos
“While many Canadian entrepreneurs have identified growth as their company’s primary objective, they find it difficult to secure the funding they need to grow while maintaining control of their businesses,” said Rossolatos. “Our goal is to help entrepreneurs scale up their mid-market businesses as a patient, minority capital partner. We’ve spent the last several months developing our strategy, honing our unique value proposition and building a talented team and network that is uniquely positioned to help Canadian entrepreneurs think big and grow. We’re excited to get started.”
Initial participants in the Canadian Business Growth Fund include BMO Financial Group, CIBC, Royal Bank of Canada, Scotiabank, TD Bank Group, ATB Financial, Great-West Life, HSBC Bank Canada, Manulife, National Bank of Canada, Sun Life Financial, Canadian Western Bank, and Laurentian Bank of Canada.
“Growth capital is good for Canada and helps drive economic activity, productivity and employment,” said Dale Ponder, chair of the Canadian Business Growth Fund. “With access to more growth capital, Canadian businesses have an even greater opportunity to achieve scale and become leaders in their fields. CBGF will strive to promote greater confidence and entrepreneurial spirit in the development of businesses in Canada.”
Photo via Unsplash.