Westcap sets new benchmark for fundraising in the province

Source: Industry West Magazine

Westcap Mgt. Ltd. (Westcap) has been an integral part of the Saskatchewan private equity and venture capital ecosystem for more than 30
years. The fund manager aligns identified capital sources with specific investment opportunities to create unique and successful investment funds that address a spectrum of capital needs in Saskatchewan. Through the continued use of this approach to fund management, Westcap and its long-standing team of experts have managed more than $1 billion of assets and invested in over 200 growth companies since inception.

“Westcap’s investment funds have been designed to fill various needs across a broad range of diverse industries and sectors which change when you have been around as long as us,” says Grant Kook, President and CEO of Westcap. “Over the past years, by providing succession and growth capital to companies we drive long-term value and opportunities for local investors while keeping great companies locally owned.”

Most recently, Westcap closed its third fund in a series of private equity offerings focused on management buyouts (MBOs) and growth capital, Westcap MBO III Investment LP (Fund III). Fund III launched in the spring of 2021 with a target of $150 million and following significant demand, received approval for an increase in capitalization from its partners to a maximum $285 million which was successfully achieved. This represents the largest raise by a Saskatchewan-based private equity fund manager in our province’s history. “Over the next decade, approximately 75% of small and medium-sized business owners in Canada will ready to transition their business,” says Rob Connoly, CFO of Westcap. “Through our series of MBO funds, we will continue to focus on providing succession and growth capital to long-standing companies involved in transition and acquisition activity.”

Westcap has also been providing local residents with the opportunity to invest at home for more than 20 years through Golden Opportunities Fund Inc. (Golden Opportunities), Saskatchewan’s first Retail Venture Capital (RVC) Fund. Golden Opportunities further invests the dollars it raises from local shareholders in locally owned companies that operate in key sectors and are driving our province’s economic growth.

Local money matters
When local capital invests, it endorses companies, provides credibility and validates ideas to outside investors. This in turn helps grow the ecosystem and builds momentum. A healthy, growing ecosystem benefits the economy overall.

Local money also creates opportunities for succession planning. As long-standing and established businesses transition to the next generation, local investment dollars keep these iconic companies, their employees, and their economic impact here in the province. Too often local companies have had to relocate for growth capital, or sell to an out of province buyer, and the company loses key employees to centralization or its local community roots that are critical to the culture. These outcomes have been a driving motivator to Westcap’s success.

More than money
Beyond filling the need for capital, Westcap recognizes that investing locally is about more than just money. “Capital grows strength. It retains and attracts talent and builds capacity and economic activity,” says Wanda Hunchak, EVP of Westcap. “Local investment boosts overall economic growth and has a major impact on the provincial GDP.” For Golden Opportunities’ 20th anniversary, an independent economic impact report was completed which found that investments made by this fund alone reached 88% of Saskatchewan towns and cities and generated $3 billion in estimated economic impact since inception which is equivalent to approximately 15 percent of the province’s GDP growth over that same time, while supporting over 15,000 jobs.

The Westcap way
Involved in both private equity and venture capital, Westcap is a diverse fund manager; however, its investment philosophy is simple. Westcap invests in people first – that are addressing important problems in big markets. Whether a company is solving a problem in a new way, a well-known entity looking to grow and innovate solutions, or a long-standing company ready for succession and growth, Westcap helps to drive this growth and in turn provide value for investors.

The big picture
Westcap brings decades of experience to the table to help companies achieve long-term success including best governance practices, and common challenges and solutions shared amongst portfolio companies and experienced leadership teams. “Westcap is more than capital. We are a partner that wants to see you succeed,” says Kook. “Westcap’s success in investing is built on our relationships cultivated over the years with entrepreneurs and investors.” This has created a network of “advocates” that can attest to the Westcap way of doing business.

Degelman Industries, a Westcap portfolio company, got its start in a Saskatchewan farmer’s field when Wilf Degelman saw the need for a rock picker and built one. Now, six decades later, the Regina based company with approximately 365 employees continues to be widely recognized for the design and manufacturing of premium agriculture and industrial equipment in countries across the globe. Degelman Industries never lost sight of its Saskatchewan roots, grew with the province and continued innovating. Westcap’s investment provided this established company with the opportunity to keep innovating, growing and expanding in a key sector from right here in the province. “One of the most important reasons that the Degelman family chose Westcap was due to its commitment to maintain Degelman’s brand and local culture. They want to see us continue to grow and succeed,” comments Blair Flavel, President of Degelman Industries. “Degelman embodies what
we look to invest in,” says Jamie Schwitzer, CIO of Westcap. “We look for companies that can provide stable, strategic, long-term growth and ensure management teams are financially aligned and committed to driving this growth.”

With 30-plus years of experience and a deep breadth of expertise, Westcap is the growth and succession planning partner of choice for companies. This is evident in the recent success of Fund III which was oversubscribed by both existing and new investors due to the model and success. “If you are a business owner, Westcap can provide capital plus strategic value for growth through our diversity of funds, stages of investing, platforms, expertise and networks,” comments Kook. “Westcap is proud to call Saskatchewan home and provide opportunities for both companies and investors.”