Investment activity in Canada’s buyout and related private equity market grew sharply in the second quarter of 2014 in terms of both deal values and volumes, according to data released today by Canada’s Venture Capital and Private Equity Association. Disclosed dollars invested in transactions (announced and completed) totaled $5.3 billion in this period, which well surpasses the less than $1 billion that was reported at the same time in 2013. Control-stake acquisitions, minority investments and other PE deals done (announced and completed), totaling 103 between April and June, also increased 29 percent from the number reported the year before.
STRONG SECOND QUARTER PRIVATE CAPITAL STATISTICS REFLECT GROWTH IN INVESTMENTS AND DEAL VOLUME
Toronto, Canada (September 3, 2014) — In the second quarter of 2014, Canada’s private equity and venture capital sectors both reported significant year over year growth in terms of capital invested and companies invested in. For the private equity sector, investment activity increased fivefold over the same period last year, while for the venture capital industry the growth was a very significant 31% according to data released today by Canada’s Venture Capital and
Private Equity Association (CVCA).
Commenting on the results, Mike Woollatt, CEO of CVCA, noted that “the rapid growth of the private equity sector in 2014 is great for the Canadian economy. Canada’s private equity industry is continuing to see robust returns derived from solid investments, which is helping drive fundraising to record levels.”
Mr. Woollatt went on to add, “The Canadian venture capital industry has also enjoyed new heights in investment activity in the recent quarter, characterized by a greater breadth of investments and more high-value liquidity events. While these accomplishments in the venture sector are encouraging, we remain concerned about domestic venture capital fundraising activity, which materially lags the pace and volume of fundraising in other jurisdictions, such as the United
States. Without an increase in capital allocation to our domestic VC ecosystem, there is a real risk of foreign investment dominating our industry, and a slowing in new company formation and growth within Canada’s innovation economy, which derives significant capital from venture capital investors.”
PRIVATE EQUITY DATA HIGHLIGHTS
The $5.3 billion of private equity invested in the second quarter of 2014 was more than five times the amount invested in the same period last year. In the first half of the year, private equity investments totaled $9.7 billion, roughly triple the $3.2 billion disbursed in the first half of 2013.
Increased investment activity also resulted in a substantial 29% increase in deals done in the quarter, bringing the quarterly total to 103 transactions. The increased disbursements related to several significant PE deals, including Encana Corp.’s asset sale to Jupiter Resources; Apollo Capital Management’s investment in CSV Midstream Solutions Corp.; Lime Rock Partners’ investment in Imaginea Energy Corp; and the ARC Financial-led investment in Huron Resources
In addition, Canadian private equity fundraising continued to outperform the record fundraising results achieved in 2013. New capital commitments totaled $7.4 billion in the first half of 2014, doubling the level of commitments reported for the same period last year.
VENTURE CAPITAL DATA HIGHLIGHTS
The amount of venture capital invested in the second quarter of 2014 continued to grow with $505 million invested across 130 deals, representing increases of 31% and 17% respectively, over the same period last year. In the first half of 2014, VC activity in investments and number of deals was significantly higher than in the same period of 2013.
The second quarter of the year saw several major financings, including those related to Verafin (Spectrum Equity and others); Wattpad (OMERS Ventures, August Capital and others); SHOP.CA Network (Difference Capital, Shaw Ventures and Torstar Corp.), and Visier (Foundation Capital, Summit Partners and others).
While VC activity continues to be robust, Canadian VC fundraising declined by 71% to $112 million versus the same quarter last year. Year to date, Canadian VC fundraising decreased by 26% from the first half of 2013.
About the CVCA
The CVCA is the voice of Canada’s venture capital and private equity industry. The CVCA’s members manage the vast majority of private capital (venture capital, private equity, venture debt, mezzanine capital) that is designated to grow Canadian businesses. The CVCA fosters professional development, networking, communication, research and education, and represents its members on all matters of public policy matters. Founded in 1974 the CVCA has been serving its members for 40 years. For more information, visit www.cvca.ca.
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To receive more detailed data, or to arrange an interview with Mike Woollatt, CEO of CVCA, please contact:
Tel: 416-487-0519 ext. 201
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