Toronto-based private equity firm Vertu Capital has announced the close of its inaugural fund with more than $300 million CAD in capital commitments.
Vertu Partners Fund I is backed by a list of limited partners (LPs) that includes New York State Common Retirement Fund, BDC Capital, BMO Capital Partners, funds managed by BMO Global Asset Management, CIBC, EDC, Manulife Investment Management, as well as several undisclosed asset managers, family offices, and industry executives.
Led by founder and managing partner Lisa Melchior, Vertu Capital appears to be Canada’s first private equity firm founded by a woman. Prior to launching Vertu Capital, Melchior spent 17 years at OMERS Private Equity, where she led the Ontario pension giant’s North American technology investment group as managing director.
The final close of Vertu Capital’s inaugural fund comes two years after its first close, and takes place during a challenging period for tech firms.
The final close of Vertu Capital’s inaugural fund comes two years after its first close in March 2021, and takes place during a challenging period for tech companies. Amid rising interest rates, funding has become harder to obtain and valuations of public and private tech firms have fallen. These are conditions that could present opportunities for private equity investors. As Melchior noted, “This is an exciting time to be in the market with new capital to deploy.”
At OMERS, Melchior’s work included leading the pension fund’s investments in Toronto-based Constellation Software, now one of Canada’s most valuable software companies, and Montréal’s Logibec, which OMERS took private before spinning out its United States (US) subsidiary MatrixCare and eventually selling Logibec’s Canadian operations.
Melchior left OMERS in 2016, founding Vertu Capital the following year. In 2018, Vertu Capital invested in Toronto payments company Carta Worldwide using partner capital. In 2019, in partnership with BDC Capital, Vertu Capital purchased Toronto-based virtual data room company Firmex, funding this deal with third-party capital via a special purpose vehicle.
Vertu Capital sold its interest in Carta to Vancouver FinTech Mogo in early 2021 in exchange for $24 million CAD worth of Mogo stock. Later that year, Vertu Capital saw what the firm claimed was its first exit when Firmex was acquired by US-based Datasite for an undisclosed sum.
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A Vertu Capital spokesperson told BetaKit that the private equity firm invests in software and software-enabled companies focused on enterprise customers with $20 million or more in annual revenue that are breaking even or profitable. According to the spokesperson, Vertu Capital aims to put in $25 million to $75 million per deal in companies worth up to $500 million and double or triple the size of its business before selling.
To date, Vertu Capital has completed two investments through Vertu Partners Fund I, backing Kitchener-Waterloo-based communications tech provider Dejero Labs and Toronto’s PathFactory, an intelligent content platform for B2B digital marketing. Vertu Capital aims to do another four to six deals through its inaugural fund.
Feature image courtesy Vertu Capital.