When many in the private equity industry were rushing to buy companies, the team at Clairvest Group Inc. (CVG:TSX) was selling. That, along with some great domain research, is why they won the Canadian Venture Capital and Private Equity Association’s “PE Deal of the Year” award last night for the second consecutive year.
This year’s feat was the 6x return they made on their investment in Shepell/FGI, backing CEO Rod Phillips in the acquisition of Warren Shepell from its luminary founder a few short years ago. Ken Rotman, Jeff Parr and Mitch Green were soundly applauded by the sold out crowd for this industry first. CVG’s Gateway Casinos deal took 2008 honours. Each investment made Clairvest’s investors hundreds of millions of dollars.
Moreover, neither was predicated on the tired idea of squeezing a company for syergies to get increased profits — both deals were winners because they grew the topline and succeeded as businesses; they weren’t fabrications of high debt leverage or market structures.
Congrats to the team! It is a great honour to win it even once, let alone two years running. When limited partners are thinking about where to put their faith next time, it won’t be hard to remember who recognized the “top”, and who blamed “the market” for their fund’s performance.
(disclosure – CVG is an investor and partner in Wellington)