News & Analysis

Wellington closes on $200m hard-cap

In addition to closing its fourth fund on $200m, private debt manager Wellington Financial has also opened a new office in San Francisco, where partner Vikram Gupta will direct the firm’s Western US strategy. 

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Wellington Financial closed its fourth flagship vehicle on its $200 million hard-cap earlier this week, according to a statement.

The Toronto-based private debt firm typically underwrites between $2 million and $15 million per transaction in mid to late stage private companies, according to its website. The firm is active in the automation, automotive parts, biotechnology/healthcare, business services, light manufacturing, oil and gas services and technology sectors, according to its website.

Wellington marketed Fund IV exclusively to Canadian limited partners, chief executive officer Mark McQueen told Private Debt Investor, though he hasn’t ruled out expanding the firm’s investor base when it comes back with Fund V. 

“We have six new institutions that we took along with our re-ups [in Fund IV],” he said. “We had the good fortune of a long track record of low volatility, top quartile returns, and that seemed to appeal to the institutional limited partnership community.”

Wellington’s investment vehicles have a re-circulating equity structure that allow the firm to reinvest returns generated by it investments through the entirety of the fund life, McQueen said. Fund III, a $150 million 2006 vintage vehicle, led $315 million of financings via 50 loans over a six year period, according to a statement.

“In our case, if we do a deal for three to four years, and that money comes back, we can use that capital again through the life of our fund,” McQueen said.

Fund III had generated a 9 percent net internal rate of return as of January, according to a 14 January release announcing Fund IV’s $190 million second close. 

In addition to closing its fourth fund, Wellington has also opened a new office in San Francisco that will be led by Vikram Gupta. Gupta will head the Wellington’s efforts in the Western US, according to the firm. He had previously worked at Western Technology Investment, JPMorgan Partners and Credit Suisse First Boston.

Wellington, which was founded in 2000, manages $600 million and maintains offices in Toronto, San Francisco and Santa Monica, California.