May 2007 - Market trends focus.doc


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May 2007 - Market trends focus.doc

  1. 1. Market trends focus of investment conference Reid Southwick Telegraph-Journal Published Tuesday May 29th, 2007 Appeared on page B1 Nearly 500 investors sitting on billions of dollars of venture and private-equity capital will gather today to learn the latest trends in North American markets. The Canadian Venture Capital Association will hold its annual conference in an Atlantic Canadian location for the first time in more than five years. Some of the industry's biggest players from across the continent and parts of Europe will convene at the Halifax Marriott Harbourfront hotel to network and learn what is hot in the national and international marketplaces. Henry Kravis, founding partner of Kohlberg Kravis Roberts & Co - one of the world's largest private-equity firms, will deliver a highly anticipated key note speech on the current state of the industry. CVCA represents the majority of private equity companies in Canada, and its more than 1,200 members have $50 billion in capital. The association's annual conference is the premier event for venture capitalists in the country. This year's conference has attracted record levels of sponsorship and attendance with nearly 500
  2. 2. investors and other business leaders on the roster. That number includes several New Brunswick businesses, representatives of the New Brunswick Innovation Foundation and Business New Brunswick Minister Greg Byrne. The three-day-long event kicked off Monday with a round of golf and a cocktail reception. A series of information sessions will take place today and Wednesday, covering topics from early stage venture capital investment to restructuring investments that are in financial distress and the emergence of the cleantech sector involving environmental companies. CVCA president Rick Nathan will announce this morning the benchmark for Canadian buyout and mezzanine funds has ballooned from 18.9 per cent to 21.9 per cent in the past year. Buyout funds invested $5.1 million in Canadian companies in the first quarter of 2007, which came on the heels of record investments of $11 billion last year. In other words, the private-equity industry in Canada is booming. "What's hot is the market on the private-equity front," said Nathan, who also the managing director of Kensington Capital Partners, said Monday. "The performance is outstanding." Nathan said industry professionals are making strong returns on their investments by identifying companies that are at the right stage of their development and ready for an infusion of capital. But regional markets outside the major centres, including Ontario, Quebec and Alberta, continue to see less activity. Entrepreneurs in New Brunswick have long bemoaned a perceived lack of private-equity
  3. 3. investment. With the CVCA's annual meeting being held in Halifax, however, regional businesses will have a chance to meet major investors. Event sponsors GrowthWorks Atlantic Ltd. and PricewaterhouseCoopers LLP are holding an Atlantic companies showcase that will give six businesses - three of them from New Brunswick - a shot at making a sales pitch to some of the industry's largest players. That is good news for Gerry Verner. The chief executive of Saint John-based AnyWare Group will make a case for a $10-million to $20-million investment round to expand the business in the United States. AnyWare produces a software product called Role Oriented Access Management (ROAM) system that provides health professionals with web-based access to databases, from patient files to staff directories. The software offers an integrated security system that allows users access to job-specific material. This means that access to patient files, for example, remains exclusively with physicians. Verner wants to attract further investment to bolster sales channels in the U.S. He said in an interview Monday that although there is a perceived lack of private-equity investment in Atlantic Canada, big investors are keen to plug their dollars in the region. "If you have the right idea and the right business model, investors don't care so much about where you're from," he said. "If you have a good story to tell, they'll invest in you."
  4. 4. AnyWare has attracted roughly $10 million in the last three years. Verner said the CVCA conference will open his eyes to what is happening on the other side of the investment table. "It's helpful for me, as one of the companies that they've invested in, to hear what they know and hear what the experts are saying about what companies at a certain size or stage should do to grow their business." The chief executive of GrowthWorks said Monday that, although the conference will serve as a networking and professional development tool for private-equity firms, there will still be room for New Brunswick businesses to forge partnerships that can one day lead to a maturing of the industry in the province and surrounding region. "It may be through the contacts and the networking we will do over the next couple of days, we can demonstrate to some of these funds that operate outside the region that there are good companies to invest in New Brunswick and the rest of the region," said Tom Hayes. "What we need to do is have some winners in terms of some of the deals funded now, which will demonstrate to other institutional investors that you can make money in the business now."