Canadian private equity firm Catalyst Capital Group has made a statement disputing a recent Reuters article that discussed the firm’s investments and track record. Catalyst said it was “singularly disappointed” with Reuters and noted that the actions of reporters reflected an “intentional disregard of the facts.” Catalyst said Reuters has proven to be “unobservant to the nature of private equity” and the firm’s achievements in “rebuilding broken companies and making them leading players in their sector.” Catalyst cited several examples, including Gateway Casinos & Entertainment Ltd, which has “already returned over $300 million to shareholders.”
The Catalyst Capital Group Inc. Provides Statement Regarding Recent Article by Reuters
March 23, 2018
TORONTO–(BUSINESS WIRE)–The Catalyst Capital Group Inc. (“Catalyst”) today provided the statement below in response to a Reuters article discussing its investments and track record:
We are singularly disappointed in Reuters and what is a clear violation of their own Trust Principles. The behavior of the reporters involved reflects an intentional disregard of the facts, as presented to them by Catalyst and as publicly available.
Reuters has proven itself to be unobservant to the nature of private equity and the accomplishments of our investment team and the teams at our portfolio companies in rebuilding broken companies and making them leading players in their sector. Our funds are structured to be long-lived to maximize value for our investors. Our process for valuing current investments is rigid, conservative and has been proven out repeatedly.
We can only stand dumbfounded by the failure of Reuters to understand the basic value creation principles required to grow companies and the care we take to protect and maximize returns. To select a few glaring examples, consider Gateway Casinos & Entertainment. With Catalyst’s support, the company has already returned over $300 million to shareholders – more than what would have been generated through an IPO in 2012 – by taking smart actions, including three debt recapitalizations, unlocking value from real estate and achieving superior operating results, with EBITDA increasing many fold since 2012, which has allowed the enterprise value of Gateway to grow exponentially. Much of this is available in the public domain and was brought to the attention of Reuters and was intentionally ignored.
We are equally dumbfounded that Reuters doesn’t understand, or care to understand, the nature of biotech companies and how they are valued on a pre-commercial basis. In fact, we expect that Therapure Biopharma’s potential financings, which we believe Reuters was aware of, will be supported by the sector’s leading underwriters. The valuation noted by Reuters and its supposedly knowledgeable sources is utterly ridiculous.
It is also incomprehensible that Reuters could distort an informational disclosure to our investors regarding litigation claims and try to portray it as included in Catalyst’s audited financial statements. That has never been the case. This questionable behavior is unfortunate and a good basis for why the UK High Court restricted Reuters from disclosing Brevan Howard Asset Management’s confidential information to prevent its misuse.
This lack of effort, understanding and dedication to the facts is unsettling given the platform upon which Reuters operates. For Catalyst and its stakeholders, our focus is on continuing to generate the results we believe are achievable.
About The Catalyst Capital Group Inc.
The Catalyst Capital Group Inc., a private equity investment firm with more than $6 billion in assets under management founded in 2002, is a leader in operationally focused turnaround investing. The firm’s mandate is to manufacture risk adjusted returns, in keeping with its philosophy of “we buy what we can build.” Catalyst’s Guiding Principles of investment excellence through operational involvement, superior analytics, attention to detail, intellectual curiosity, team and reputation are key to the firm’s success. The Catalyst team collectively possesses more than 110 years of extensive experience in restructuring, credit markets and merchant and investment banking in Canada, the United States, Latin America and Europe. For more information, please visit www.catcapital.com.
Dan Gagnier, +1-646-569-5897
Photo courtesy of Reuters/Chris Helgren