Canadian venture debt manager hits first close

Wellington Financial is seeking $300m for its fifth venture debt fund, with the ability to recycle equity bringing the potential investment to $900m.

Canadian venture debt provider Wellington Financial has reached a first close on its fifth fund and is well on the way to hitting its hard-cap of $300 million in equity commitments, the firm said. 

Fund IV raised $200 million in equity with the ability to recycle into other deals. It invested more than $225 million via 28 growth capital transactions over three years. 

The latest fund will also be able to recycle equity into new deals twice more following initial deployment over the vehicle’s 10-year lifetime, putting the potential investment at $900 million, said Mark McQueen, Wellington Financial’s president and chief executive officer. 

The higher target means the Toronto-based firm will increase its ticket size range from $2 million-$15 million (and up to $30 million via syndication) to an upper level ticket of $40 million. 

“We are honoured to have earned the sustained confidence of institutional investors, entrepreneurs and their venture capital partners,” said McQueen. “Entrepreneurs need comfort that firms such as ours can grow with them as their needs evolve, and this new fund can do just that.” 

The vehicle will make loans to fast-growing companies in Canada and the US. The firm will only lend to companies with a minimum of $5 million in trailing revenue and well-defined growth strategies. 

The firm has also recently hired Ash Vaidya as a partner in its Silicon Valley office. Vaidya joined from Hercules Technology Growth Capital where he sourced, structured and executed debt transactions with public and private tech firms. 

Vaidya was also at TriplePoint Capital and investment bank JPMorgan where he worked on debt and equity capital raising for high-growth technology companies. 

Wellington Financial is a privately-owned speciality finance firm providing term, venture and amortising loans of up to $40 million. The firm manages $900 million in investments and has offices in Silicon Valley, Santa Monica and Toronto. 

Wellington Financial is controlled by the firm’s management and Clairvest Group, a Toronto-based private equity firm.