$375-M investment fund puts focus on Manitoba

Hey there, time traveller!
This article was published 02/03/2024 (647 days ago), so information in it may no longer be current.

When Gary Coleman sought to sell his Manitoba-based logistics business, he searched outside the province.

The best opportunity came in the United States. He sold Big Freight Systems, which his family founded in Steinbach, to large American transportation company Daseke Inc.

That was roughly six years ago.

Now, Coleman is overseeing a fund aiming to keep Manitoba-based companies’ ownership and capital funding in Western Canada.

The TriWest Opportunities Fund Manitoba, which contains up to $375 million for investment, launched this week.

“If this fund would’ve been available when I was selling, I would’ve been chatting with them,” Coleman said Friday. “I understand the opportunity here.”

Provincial government-funded entity Manitoba First Fund has committed $25 million to TriWest Opportunities.

The Manitoba First Fund doesn’t directly invest in the province’s businesses; instead, it partners on new funds to facilitate local capital. It’s meant to draw private-sector investment to the keystone province.

TriWest Capital Partners, a private equity firm covering Western Canada, has at least $350 million available for the new Manitoba-based fund.

Coleman is the fund’s senior director. He expects investment deals to happen in three ways: the fund will reach out and “plant seeds” with businesses contemplating selling; the fund’s operators will receive inbound calls; and the fund will work with local merger-and-acquisition experts.

The TriWest Opportunities Fund will invest in Manitoba-based companies with annual cash flows between $2.5 million and $50 million.

“It’s the Manitoba-centric, centrally focused, access to capital business model,” Coleman said.

The former Progressive Conservative government funnelled $100 million into the Manitoba First Fund in 2022 and 2023.

Since those announcements, it has created partnerships with two other private equity firms.

The two previously announced partnerships, which account for $40 million of Manitoba First Fund’s money, have not yet used Manitoba First funding on investment deals with local businesses.

“We’re hopeful there will be (deals) soon,” said Ken Ross, chief executive of Manitoba First Fund. “When it comes to investments, it always takes time… People on both sides of the table have to feel comfortable.”

The Manitoba First Fund announced its initial $25-million investment with WestCap Management Ltd., a Saskatchewan venture capital money manager, in March 2023. WestCap dedicated $60 million and four Manitoba credit unions supplied another $30 million.

Manitoba First Fund’s second announcement was in August 2023. It committed $15 million to a fund run by PFM Capital, another Saskatchewan-based operator. PFM Capital matched the $15-million investment.

Both funds target businesses with revenue already in the $10-million range.

There’s $35 million waiting for use in the Manitoba First Fund. Ross said he’s been rallying support for the “early capital” end of the investment spectrum.

TriWest Opportunities is the biggest venture, to date, the Manitoba First Fund has joined.

Ross expressed confidence in TriWest, which is based in Calgary.

“They are a very successful fund,” he said. “The nature of their fund (and) the nature of their approach to supporting investments that they do make goes far beyond just the capital.”

TriWest’s portfolio history includes Landmark Cinemas, which it divested from in 2017, and Monarch Industries, which it’s currently invested in. It’s raised more than $1.6 billion during its 26-year lifespan, its website touts.

TriWest is enthusiastic about Manitoba.

“This is one of the most entrepreneurial and dynamic markets in Canada for building companies across multiple industries,” TriWest Capital Partners senior managing director Mick MacBean said in a statement.

Manitoba’s centrality allows for business growth, he added.

The goal is to have funds available in Manitoba for all stages of business growth, Ross said. Profits the Manitoba First Fund receives from its investments will be funnelled back into the funds it’s connected to, he explained.

gabrielle.piche@winnipegfreepress.com