This is a repost from the amazing video-blogger Kristina Tomaz-Young of Venture Cap TV

Welcome to our THREE part video cast series of the Canadian Venture Capital 2010 Conference. And, what an event it was! Check out the must see videos below, here for the link to file of all speaker bios and here for the link to the picture gallery.

Prominent leaders from the private equity and venture capital community participated in record breaking attendance! It’s speaks much to the energy that the CVCA passionately commits to the industry.

Sleeves were rolled up, ideas were churning….you could literally feel the exciting energy pulsating throughout the crowd at the panel discussions and in the hallways. Lessons & opportunities were shared, valuable contacts were made, and fun was also most definitely had at the evening gala with their Entrepreneur of the Year Award and the hilarious Rick Mercer show, not to mention the Scotch tasting event and great mingling!

This year’s theme was Driving Innovation. And we were privileged to learn from impressive keynote speakers like Glenn Hutchins co-founder and co-CEO of Silver Lake and red carpet panelists including Jacques Bernier (Managing Partner of Teralys Capital), Chris Albinson (Managing Director of Panorama Capital & co-founder of the C100), Paul V. Lee (Managing General Partner of Vanedge Capital and so many more who shared their perspectives and sector possibilities to explore. If you’d like a full line up of the presenters and their bios, please click here. Conference Chair David Adderley of Celtic House Venture Partners and his organizing committee certainly put on an unforgettable, valuable conference for the private equity and venture capital community.

So if you’re raring to go…come check out:

• Part 1 features Day 1, Part 1 where we’ll meet brilliant, innovative thinking venture capitalist and conference Chair David Adderley who shares a great recap of this incredible event as well as one of the CVCA’s highly valued sponsors, the eloquent Ann Bowman of RBC.

• Part 2 features the rest of Day 1. Come here what Chris Albinson (Panorama Capital) and KenKen Cheveldayoff (a Ministry of Enterprise at the time of the event) have to say about what our Canadian companies do very well, what we need to fix and our opportunities here and abroad.

• Part 3 covers Day 2 looking at innovative ways to approach new markets globally, what the future holds and breeding success with entrepreneurs. Check out our interview with Jacques Bernier (Teralys Capital) about rebooting our system to be the best, what we do right and what we need to improve. We also had a chance to meet up with Paul V. Lee (Vanedge Capital) who spoke to us about the closing of his exciting new fund and the exciting opportunities available.

• And for those of you who’d like access to Jacques’ reboot analogy, for an entertaining depiction of our industry scenario! Ah, yes, it’s never boring with Jacques!

Before we dash, a few words of thanks for the accomplishments, kindness and generosity of our colleages..so:

• Thank you to Richard Remillard (CVCA Executive Director), Lauren Linton (CVCA Marketing Director), the CVCA team and the conference Chair David Adderley for an outstanding event.
• A big thank you to all our featured guests for taking the time to share their rich advice and experiences.
• A special thank you Christian Zabbal of Black Coral Capital for opening doors and encouragement ever since vc-tv was a spark in my eye!
• Un gros merci beaucoup to the energetic, brilliant Chris Arsenault of iNovia Capital the CVCA’s 2008 Conference Chair (which was also a record breaker!) for being a relentless, passionate champion for the venture capital/start-up community and growing eco-system. We’re privileged to have you at the helm with your fellow leaders.
• Thank you to the video production start-up company FFwd Films for your talent and delivering on your promise to produce a professional product. Challenges, obstacles and extraordinary circumstances & all, we kept on going and we did it!!!
• Much gratitude to Embrace and your wonderful fellow sponsors for your kind sponsorship and valuable support.

And, thank YOU for visiting VC-TV. Come back again real soon!

(*Please note that out video casts are normally posted very soon after each event or interview. This was the first time we were delayed. We’re a start-up, and like many start-ups, we ran into some start-up challenges. But, solutions were actively sought, situations were co-operatively resolved, and we’re so pleased to share our coverage of the event with you. And this time, rather than one videocast released at a time, here’s all three! We hope you enjoy them!)

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Re-post: Mark McQueen and the Wellington Financial Blog of 12 January 2010

Good news abounds for the Canadian private equity industry.

Just last week, Onex just closed on a new US$4.3 billion fund, called Onex Partners III, of which US$3.5 billion came from third party institutional investors. That US$3.5 billion is 75% more than had been raised for Onex II. According to CPP Investment Board’s website, it committed US$400 million to Onex Partners III in 2008; this commitment is more than double their US$150MM stake in 2003-vintage Onex Partners I.

CPPIB’s 2003 vintage investment in Onex I earned a 124.7% return on the capital invested (see prior post “CPPIB Canadian general partner Q2 2009 performance numbers” Nov 14-09).

Oncap, the small and mid-sized buyout arm of Onex, has also come through the recession with flying colours. $575 million Oncap II has been prudent about capital deployment during private equity’s “Golden Era”, and still has plenty of dry powder to invest. In a lower-valuation environment, having a chequebook is everything. Particularly when many U.S.-based PE funds are marketing their own new funds, and likely out of the market for new deals.

Birch Hill Private Equity Partners had a fabulous first close of $425 million in November. Considering the state of the pension fund universe and the negative impact that the drop in the public equity markets has had on the allocations that pensions have to “alternative assets”, this $425 million number is blockbuster. The fundraising target is $850 million in total. Their Sleep Country and Shred-It investments stick out as recent successes.

Clairvest Group Inc. had a $200 million first close on Clairvest Equity Partners IV, with one Ontario-based pension fund subscribing for $100 million at the outset. The balance of the $200 million comes from Clairvest’s own public company cash, a majority of which is owned by the management team and board of directors. Given their success with back-to-back PE “Deals of the Year” (see prior post “Clairvest makes it back-to-back “Deal of the Year” awards” Sept 23-09), you can be sure that $200 million figure will grow larger with subsequent closings in 2010. CPPIB’s $50 million commitment to 2001-vintage Clairvest EP Igrew by 51% in value as of the last reported quarter.

For its part, Torquest Partners has been busy closing new investments and financing tuckunders for portfolio company FirstOnSite. They even recruited the well-respected and popular Michael Hollend away from the excitement of the venture capital industry; Michael officially became a merchant banker in December. Every time I take my Nikon D300 on the road, I take a piece of Torquest with me via their Lowepro investment.

Canada’s private equity industry is definitely on a roll.

MRM
(disclosure – CVG is a partner in Wellington Financial and an LP in our fund)

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Interview with Thomas J. Barrack Jr. of Colony Capital

By Chris Arsenault Managing Partner at iNovia Capital

Please note that a full copy in .pdf of the magazine can be downloaded on the CVCA web site.

First, you survive the crisis, then you take advantage of the opportunities afforded by the confusion, advises CVCA keynote speaker Thomas J. Barrack Jr.

At this year’s CVCA Annual Conference, held in Calgary in late May, we had the pleasure to have with us, as a keynote speaker, Thomas J. Barrack Jr., Founder, Chairman and CEO of Colony Capital, LLC. Barrack’s keynote speech was of utmost interest and very enjoyable, in part because he presented the audience with his views on both sides of the harsh reality of today’s private equity buyout market, outlining the key challenges as well as some great opportunities.

Like many other private equity buyout firms across North America, Barrack’s firm, Colony Capital, is having a tough time adjusting to all the changes caused by what is considered to be the worst market ever for the U.S. investment community.

Even though Colony Capital has only one transaction of importance in Canada, the 2006 acquisition of Fairmont Hotels & Resorts Inc., Barrack believes Canada will be one of the big winners coming out of this global crisis. This is being driven by the country’s stronger banking system, smaller and better performing buyout funds, and fundamentally sound assets across numerous line of business. They weren’t as badly impacted by the sub-prime crisis due to the fact that they weren’t overly leveraged with debt.

Barrack recently took the time to expand on some of his views with Private Capital.

Chris Arsenault: What are your current views on the state of the private equity industry in general?

Thomas J. Barrack: Let me summarize a few of my instinctive views into two categories, short term and long term.

Short term: debt is the new equity (rescue, restructuring and acquisition of all forms of distressed debt); alternative energy subsidized platforms will be the flavour of the year; real estate will continue to get clobbered; private equity will perform poorly for another two years.

Long term: oil is the new gold; alternative energy projects will reduce oil supply and increase cost; real estate will be the asset of choice; technology will play a bigger role in communications and will impact the real estate model and travel; private equity will outperform other asset classes and VC and technology funds will be at the top of the list.

Arsenault: Do you see more challenges or more opportunities for private equity players?

Barrack: Colony Capital has a few billion in dry powder, and we are being asked: “Don’t go to fast, don’t be too opportunistic.” The reasoning behind such comments is understandable and is being felt across the whole private equity community. The major investors in private equity funds are banks, pension funds and endowment funds, and their contributions are directly impacted by the lack of distribution by private equity funds. They need distributions in order to make their contributions but they got a double hit, first by a slowdown in distributions AND simultaneously by a 50 per cent asset value loss.

The super funds are the ones that are suffering the most though, they lost more money in the last two years then they had made over the last 10 years. The fee dilemma created by these funds also didn’t help as some firms were leveraging their fees to a point where it killed the model of sticking to finite capital for fees and infinite capital for investments.

We are seeing great opportunities, sound businesses being deleveraged, and true value that can be built through time. We are going back to more realistic growth objectives and we expect to do very well in the mid to long term. In the short term we have to focus on the challenges from an inches and feet perspective, not miles. We need to fix the trust issues between fund managers, investors, lenders and the markets. High leveraging multiples must be part of our past.

Arsenault: How are private equity buyout funds, such as Colony Capital, reacting to the new paradigms?

Barrack: This crisis will pass like all other crises. The key is two-fold: First you need to survive; second, you need to take advantage of the opportunities created by confusion. Experience will show a lot of its value in the coming 18 to 24 months. Inflation will return exponentially within two to three years. Private equity & real estate will directly benefit from the short-term deleveraging and the long-term inflation.

Arsenault: What does your experience tell you?

Barrack: That we need to return to principled leadership by making decent and informed decisions based on true value for the long term. No short-term value creation thinking. Even though the short term will continue to be unpredictable, the medium to long term are totally predictable. We entered into an era of broken confidence, adrift in a sea of unfulfilled expectations. New equity owners will take the reins of very valuable operating companies, acquire assets on a lower cost base and start deleveraging. And with these new teams being incented with long-term value creation goals, investor returns will be restored, and with lower leverage ratios, confidence and trust will be restored. But first, you need to survive!

Arsenault: How much deleveraging needs to occur?

Barrack: $6.9 trillion. So we will still have pretty shaky grounds in the short term. In the long run, the winners will also include those able to convert debt into equity.

Arsenault: How about your views on Canada?

Barrack: Canada can be a strong beneficiary of what is happening. The U.S. is in its worst shape ever. While here in Canada, the banks are solid, we haven’t seen any hyper leveraging; no super funds were put in place. And in these times unique skills are required, different tools are needed, and Canada is better equipped to delicately take advantage of the opportunities created by the numerous short-term stimulus packages.

Arsenault: Any other points you would like to share?

Barrack: The private equity model is changing and the focus will be going back to slower, more realistic growth and building stronger companies. A clearer understanding of the fundamentals – honesty, integrity and force of character – will show. I think many older fund managers will take this opportunity to retire, giving more room to younger more energetic managers to step in. And hopefully they will do things right and slow and understand they need to bring the confidence back, the circle of trust.

This global crisis is a savior for some, as it basically gave all fund managers a free “Get out of Jail” pass for returns!

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By Chris Arsenault, Managing Partner & COO at iNovia Capital

Within 3 days I probably saw more Tweets and Blogs about the Canadian Venture Capital Ecosystem and Canadian Entrepreneurship than I’ve seen in any given month! Rants, Raves, Criticism and Support, some comments were without any dept while others provided insight. Over the last few weeks, we started hearing about the different provincial government initiatives to support, as investors, the venture capital industry, thus addressing in part the lack of equity financing for existing and new promising technology companies across Canada. Following the CVCA publication earlier this year of a Comprehensive Study on The Impact of Venture Capital in Canada on Economy, Jobs and Innovation (link), many provincial governments jumped on the bag wagon and were announcing fund commitments, new fund creations and/or new budget allocations to VC in order to show their support and help in addressing this crying need for more venture capital funding for Canadian businesses.

Even though we still haven’t resolved the fundamental issue of having private capital flow to entrepreneurs with high growth businesses via more LP commitments towards privately managed venture capital funds, I was pleased to read about the initiatives, the interest and comments from the various players of our ecosystem. The level of comments I received (online and directly via email) from my recent post about the indirect benefits of the recent Quebec government commitments towards venture capital (first posted on Montreal Tech Watch) $5 billion to end up in the hands of Canadian entrepreneurs, nothing less! told me one thing: Yes, people care, people want change, people are showing leadership, support and interest. I’m not saying that everybody agreed with what they understood was going on and how the challenges are being addressed, many had their own views on the Canadian funding issues and had very different opinions, and that’s a good thing, I respect that, as long as those who are voicing their opinions can show leadership by causing action and are participating in the debate by building our industry, not purposely demolishing it.

I suggest you checkout the following blogs for more views and angles, some are more positive than others, yet they all offer additional insight, such as Suzanne Dingwall: Ont. Gov’t As A VC: In with a Whimper, Not a Bang; Mark McQueen’s OVCF dips toe in Ontario waters with “commitment” to Georgian Partners; and entrepreneur start-up CFO Mark MacLeod’S Unfair Advantage only to name a few.

The article from The Canadian Press, and interview with Edmee Metivier, the Business Development Bank  executive vice president of financing, gave a glimpsed of the importance of the continued support needed for our Canadian technology ecosystem and the role some government agencies (such as the BDC) play ‘Lost generation’ of technology threatens Canada: official; The techvibe Canada’s Venture Capital industry is bad? blog posted comments and perspective from Brian Sharwood. Which in itself was interesting because it was a pure entrepreneurs’ view on the VC industry and start-up related government economic development agencies, questioning the way the system works from his angle.

But then… then… came the infamous WSJ article with as interviewee:  Mark Skapinker. Ouch! That one hurt. Why? Because the message that came across was wrong, the burning Canadian flag was an insult, and it created a false generalized impression that we, as Canadian Entrepreneurs and VCs had failed. No the Canadian Venture Capital Community is not dead nor broken, it’s evolving and that’s a good thing! The Canadian Venture Capital Community, like in any other country, needs to adapt to its own national realities while at the same time face global competition. And secondly, we do have great new and recurring entrepreneurs, that have proven time after time that we can built great companies (even though we end up selling most of them to foreigner). Can Canada afford to have more proven and successful Canadian Tech CEO’s and Entrepreneurs? Of course, 10 times more, easy! Do Canadian Venture Capital Fund have enough financial resources to fund all the great deals out there? No, and we need to convince more institutions to allocate funds to VC & PE and we need toshow then hard results and strong IRRS!   

For those of you who missed some of the action, here are  the few must read links related to the infamous article:

1.     The Wall Street Journal article itself: O Canada VC, We Stand On Guard For Thee

2.     The reaction, among others of Mark McQueen: Skapinker gives his homeland the Bronx Cheer

3.     The clarification blog by Mark Skapinker: Say it like you see it – and get kicked in the ass

4.     The Rick Segal reaction: Owww! I hate getting hit from behind

5.     The clarifying-clarification of Mark McQueen: Skapinker gives his homeland the Bronx Cheer part 2

I personally think that we can wish and want, complain and comment as much as we want. But the only way to build a successful business, a successful fund, to build a strong ecosystem, to innovate in an ever-changing environment, is by showing leadership. No one person, nor firm nor government will make any true difference “alone”. We can’t expect everybody to agree on “how” our ecosystem should be built or how our industry should thrive. But we can agree to respect the leadership of others, to work towards building a strong ecosystem and support those who take initiative in paving the way towards solidifying our Entrepreneurship and Venture Capital base.   

Call to action! If someone doesn’t agree on how things are being done, then instead of complaining, show leadership and take action. Everybody, in its own capacity, can provide leadership, do his/her part, or at the least, support the leadership it believes is right.

I look forward to read more about what SHOULD be done, yet I sincerely expect to witness more of what WILL be done.

Chris

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