Toronto Shop Nears Finish Line For Fourth Fund

Executives at Imperial Capital have raised C$110 million (US $101 million) for their fourth fund and expect to stop raising cash by the end of June, a source familiar with the fundraising told Buyouts.

The Toronto-based buyout shop’s target for Imperial Capital Acquisition Fund IV LP is C$350 million, and firm executives might still manage to get there. There is a “strong possibility” of another C$50 million in commitments from institutional investors and another C$50 million from wealthy individuals, our source said, as well as up to seven other wealthy families that may invest as much as C$25 million each.

Imperial Capital changed course as to who they targeted as limited partners midway through the effort after feeling the impact of the financial crisis firsthand, our source said. The shop started raising the fund in March 2008 and had a book of C$200 million (US $183 million) in likely commitments from U.S.-based institutions that collapsed to C$50 million following the crisis. Once that happened, Imperial Capital, which did not employ a placement agent to help raise the fund, changed its focus to wealthy individuals and families.

LPs include Bank of Montreal, CIBC, Kensington Capital Partners, a Toronto-based fund-of-funds; and Nesbitt Burns, a Toronto-based boutique investment bank. So far, about 100 wealthy individuals have also committed to the fund, whose terms are the “2 and 20” industry standard.

Bernard Vaughan is a Senior Editor at Buyouts magazine.