Portage is expanding its investment strategy with an agreement to oversee the FinTech assets of American venture capital (VC) firm Point72 Ventures.
That deal, which Portage said closed today, grants the FinTech-focused Toronto firm oversight of a portfolio of mature, later-stage FinTech companies. It marks Portage’s first formal foray into secondary investments.
Paul Desmarais III described this transaction as “an important milestone in Portage’s evolution as a global FinTech investor.”
Secondary investments include purchases of equity stakes in businesses from existing shareholders (including founders, employees, and other investors) and fund interests from general partners (GPs) or limited partners.
Select Point72 assets have been transferred to a new, $280-million USD ($389-million CAD) continuation vehicle (CV) managed by former Point72 partner Tripp Shriner, who has joined Portage as a general partner (GP) in this transaction.
Shriner, who will also contribute to Portage’s broader investment strategy, said in a statement that Portage’s expertise, global ecosystem, and long-term approach “creates an ideal environment for these companies to thrive.”
“As a scaled platform with deep domain expertise and support infrastructure focused on FinTech, we believe Portage is well-positioned to be an active participant in the FinTech secondary market,” Shriner told BetaKit. He noted that Portage expects secondaries to become “a more common liquidity alternative” within the VC industry going forward.
Goldman Sachs Alternatives led the investment in this CV. A Portage spokesperson confirmed to BetaKit that the CV is also being financed by Portage and an unnamed European family. Point72 is also retaining a 40 percent stake in the CV. This CV joins a Portage portfolio that already includes a late-stage FinTech fund and a series of early-stage FinTech funds. Portage has also entered into a services agreement to oversee other Point72 assets not being transferred to the CV.
Founded in 2016, Portage is the FinTech investment arm of Montréal-based financial services conglomerate Power Corp. Held under Power Corp.’s alternative asset management arm, Sagard, Portage oversees $5.7 billion USD in assets under management across 115 portfolio companies.
In a statement, Sagard chair and CEO Paul Desmarais III described this transaction as “an important milestone in Portage’s evolution as a global FinTech investor.”
Connecticut-based Point72 is funded by New York hedge fund billionaire Steve Cohen. The Globe and Mail has reported that Point72’s FinTech portfolio includes more than 40 private companies. This group includes New York City-based DriveWealth, an embedded FinTech focused on investing, and Toronto’s Flybits, a company Portage already holds a stake in that helps banks improve their customer experience. Flybits is the lone Canadian company in this group.
RELATED: Lack of M&A and IPOs drives global secondary market to new record
In a statement, Portage co-founder and CEO Adam Felesky said that the firm has confidence in the strength of Point72’s portfolio and sees synergies with its existing portfolio, which includes fast-growing Canadian FinTech firms like Wealthsimple and Koho Financial.
“It’s a compelling opportunity to acquire high-quality assets, attract top talent, and solidify Portage’s position as a preferred capital partner for FinTech investors,” he added.
Amid a lack of mergers and acquisitions and initial public offerings, global secondary market activity has recently been heating up. Established Canadian tech companies like 1Password, Clio, Cohere, Faire, Fispan, Jane Software, and Safe Software are among the Canadian tech firms that have taken advantage of this trend and executed sizeable secondaries since the beginning of 2024.
Feature image courtesy Portage.