Lack of Investment: Manitoba First Fund (MFF) yet to Invest $100 Million in Local Enterprises
In April, it will be two years since the former Heather Stefanson government announced that it would commit $50 million to a new venture capital fund of funds, called the Manitoba First Fund (MFF). However, none of that money has yet to be invested in Manitoba enterprises. The financial commitment from the government eventually doubled to $100 million about a year later, but still, the MFF has not made any investments in local businesses.
Mid-Market Companies Targeted by the Connect MB Growth Fund and Apex IV
Out of the $100 million committed by the MFF, $40 million has been allocated to two Saskatchewan-based fund operators – the Connect MB Growth Fund managed by Westcap Management Ltd., and a new fund run by PFM Capital Inc. called Apex IV. Both funds are targeting mid-market companies that are already established with revenue in the $10 million range and are looking for growth capital or investment to facilitate succession planning.
Slow Start: Delays in Investment Opportunities for the MFF
Grant Kook, the CEO of Westcap Management, explained that Connect MB Growth Fund only finished raising money last summer, so they have only been actively seeking investment targets for the past four or five months. Due diligence takes time when it comes to private equity, and they are currently looking at 15 to 20 different companies at various stages of due diligence. The fund should be announcing its first transaction in the coming weeks.
Education and Remedial Work Required to Reintroduce Venture Capital in Manitoba
Ryan Klassen, the Manitoba lead for PFM Capital’s Apex IV fund, stated that reintroducing the venture capital option into the Manitoba landscape has required some remedial work. They have been spending a lot of time educating and informing relevant parties that this option exists once again in the market. While it may take some time to see the uptake, early indications suggest that they are confident with the approach and plan they have in place.
Anticipation Builds as MFF Gets Close to Sealing Deals with Additional Funds
Ken Ross, the CEO of MFF, has expressed that the fund is getting close to finalizing deals with additional funds. While the first two partner funds have focused on established companies in the market, the MFF is also expected to invest in funds looking at early-stage financing. Klassen has emphasized that rushing into bad deals is not beneficial, and it is crucial to align all partners to ensure good transactions come out of this venture.
Analyst comment
Positive news: Lack of Investment: Manitoba First Fund (MFF) yet to Invest $100 Million in Local Enterprises
As an analyst, the market is expected to see an increase in investment opportunities in Manitoba enterprises as the MFF is getting close to finalizing deals with additional funds. This will provide growth capital and support succession planning for mid-market companies. Although there have been delays, the MFF is actively seeking investment targets and is confident in their approach and plan. Reintroducing venture capital in Manitoba requires education and remedial work, but early indications suggest a positive outlook.
