In the latest episode of The Private Equity Podcast, Jeff Wigle, Managing Director and Group Head at Banyan Capital Partners, shares his insights and expertise on transitioning portfolio companies for growth. Jeff emphasizes the importance of long-term value creation, leveraging technology and managing cultural change to avoid common private equity pitfalls and make data-driven decisions.
Private credit volumes reached $1.5 trillion globally at the beginning of 2024 (vs. $1.0 trillion in 2020) and are projected to grow to $2.8 trillion by 2028. The US market makes up ~$1.0 trillion of volume, with the European (including the UK) market accounting for most of the remainder. Private credit has clearly become ubiquitous in the US market and is recognized as an increasingly attractive alternative to traditional US bank debt in the mid-market segment and Term Loan B (TLB)/high-yield bond market within the large cap space.
However, private credit in the Canadian market remains nascent and many of the private credit firms that have formed in Canada have pointed their origination efforts firmly towards the US market given the greater scale of opportunities available.
The obvious question to contemplate is why the Canadian market has not evolved or developed in the same way as that of the United States or Europe. Unique to the Canadian lending landscape is the dynamic of the “Big Six” domestic banks accounting for 80-90% of the lending market. These banks are very well-capitalized, have aligned themselves to balance sheet growth as a key performance metric and are relationship driven. Therefore, the typical Canadian borrower (especially sponsor-backed), can generally operate quite well within the confines of the traditional Canadian loan market. In both the United States and Europe, private credit growth is attributable to regulatory changes and banking sector consolidation that has yet to materialize to the same extent in Canada.
The opportunity for private credit in the Canadian context will likely not be the same as the United States, where it has evolved as the clear alternative to traditional bank debt. However, we expect that the asset class will at least be a largely complementary solution to existing banking relationships in the near-term.
Where private credit in Canada will excel as an alternative term debt provider is in specific situations and at points in time such as:
Private credit in Canada is evolving as a complementary product to the Canadian banks rather than a direct competitor/alternative, and often occupies a segment best termed as “bank market adjacent.” Essentially, private credit is able to provide a solution at a particular stage in a company’s development that provides the necessary flexibility vs. traditional bank appetite/offering. The goal for all parties involved is for that company to eventually grow to a stage that calls for traditional bank debt.
Although the markets are different, the key advantages of private credit seen in the United States and Europe hold just as true in the Canadian context. These borrower preferences, as outlined below, are advantages that many borrowers in the United States and Europe are comfortable paying a premium for:
Relationships will always be a key consideration for entrepreneurs/CFOs/CEOs and the perceived risk of moving your lending relationship away from a traditional bank. Questioning lender reaction through a period of underperformance or a situation requiring flexibility are legitimate concerns when entering new relationships. However, many of the Canadian private credit firms are just as relationship-driven as the Canadian banks – another key difference between the Canadian and US/European market evolution. These firms are in the process of carving out a lending niche in a bank-dominated market and, in addition, many of them are financially supported by large Canadian entities who place high value in reputation and relationships within the Canadian market.
In conclusion, private credit in Canada has not reached the levels of growth or relative scale realized in the United States or Europe. Despite the differences in respective banking environments, private credit does serve a purpose in supporting Canadian businesses/entrepreneurs and the asset class will continue to develop and grow in Canada as banking dynamics and borrower preferences evolve.
For further information or to discuss financing for your next opportunity, call the team at MidStar Capital.
Oakcreek Golf & Turf is pleased to announce leadership changes, effective January 1, 2025. Barrie Carpenter will transition to the role of Chairman of the Board, and Patrick Nolan will succeed him as President and CEO.
Jeff Wigle discusses Banyan’s 12-year partnership with Purity Life and the world of private equity on the Purity Pulse podcast.
Banyan Capital Partners (“Banyan”), a leading Canadian middle market private equity firm, is pleased to announce its investment in Innovative Surface Solutions LP (“Innovative” or the “Company”), a leading distributor of liquid surface solutions in North America. Innovative marks the inaugural investment through Banyan Committed Capital LP, an evergreen investment vehicle that has recently closed its first $216 million tranche of commitments.
Founded in 1986, Innovative Surface Solutions distributes liquid surface solutions to large treated salt partners, commercial customers, water treatment clients and government agencies across North America. Headquartered in Ajax, Ontario with its U.S. headquarters in Glenmont, New York, Innovative operates seven terminals with the capacity to store over 200 thousand metric tons of liquid product and process over 300 thousand metric tons annually, comprising the largest liquid distribution network in Eastern Canada and the Northeast U.S.
Banyan is partnering with the Company’s CEO and existing majority owner, Greg Baun, who has served in this role since 1994, to help facilitate Innovative’s next phase of growth. Greg will remain in the role of CEO post-close and retain a significant ownership stake in the Company.
“I am excited to be partnering with Banyan Capital Partners. Their long-term investment philosophy aligns with the objectives of my team to continue to grow our business throughout North America,” said Greg Baun, CEO of Innovative Surface Solutions.
“Innovative is uniquely positioned on the east coast of Canada and the U.S. to provide essential road safety and industrial solutions to its customers for years to come. Banyan is looking forward to working with Greg and his team as we embark together on this next chapter of growth,” said Matthew Segal, Managing Director and Partner at Banyan Capital Partners.
Founded in 1986, Innovative distributes liquid salts, primarily magnesium chloride and calcium chloride mixed with additives for de-icing, dust control and various industrial applications. The Company services a diverse customer base including large treated salt partners, commercial customers, water treatment clients and government agencies including regional municipalities, townships and counties. Headquartered in Ajax, Ontario with its U.S. headquarters in Glenmont, New York, the Company operates seven terminal facilities with the capacity to store over 200 thousand metric tons and processes over 300 thousand metric tons annually.
Founded in 1998 and under current management since 2008, Banyan Capital Partners is a Canadian based private equity firm that makes equity investments in middle market private and public companies throughout North America. Through a long-term investment approach, Banyan has developed into one of Canada’s leading middle market private equity firms with an established track record of success in providing full or partial liquidity to founders, families and entrepreneurs and helping them take their business to the next level. Banyan is part of Connor, Clark & Lunn Financial Group Ltd., an independently owned multi-boutique asset management firm whose affiliates are collectively responsible for over $100 billion in assets under management on behalf of institutional, private and retail clients.
Contact:
Jeff Wigle
Managing Director
Banyan Capital Partners
(416) 564-0737
[email protected]
Banyan Capital Partners (“Banyan”), a leading Canadian middle market private equity firm, is pleased to announce it has closed the fundraising for its first tranche of committed capital at $216 million in a newly created evergreen fund, Banyan Committed Capital LP (“The Fund”). Funding was provided by high net worth investors of Connor Clark & Lunn Private Capital Ltd., Connor, Clark & Lunn Financial Group Ltd., and the principals of Banyan. With this first committed capital raise, Banyan aims to build a sustainable, diversified portfolio of value-oriented private equity investments.
Banyan will continue with the long-term, partnership-focused investment philosophy and approach which has led to its success since 2008. Unlike traditional private equity firms, Banyan has the ability to hold its investments for up to 50 years.
Banyan will seek to make equity investments in the range of $10 million to $50 million in businesses with an established track record of generating annual EBITDA in the general range of $5 million to $15 million. Additional fundamental characteristics of targeted businesses include; a Canadian or U.S. headquarters, a clear competitive advantage, identifiable growth opportunities and the existence of, or potential to, generate significant free cash-flow.
Since 2008, Banyan has invested over $190 million across seven platform investments and completed an additional 10 add-on acquisitions across a breadth of industries. For more information on Banyan, please see www.banyancapitalpartners.com.
Founded and under current management since 2008, Banyan Capital Partners is a Canadian based private equity firm that makes equity investments in middle market private and public companies throughout North America. Through a long-term investment approach, Banyan has developed into one of Canada’s leading middle market private equity firms with an established track record of success in providing full or partial liquidity to founders, families and entrepreneurs and helping them take their business to the next level. Banyan is part of Connor, Clark & Lunn Financial Group Ltd., an independently owned multi-boutique asset management firm whose affiliates are collectively responsible for over $100 billion in assets under management on behalf of institutional, private and retail clients.
Jeff Wigle
Managing Director
Banyan Capital Partners
(416) 564-0737
[email protected]
With 2020 behind us and the first quarter of 2021 coming to a close, we wanted to take this opportunity to provide an update on our business and investment criteria. We are proud to announce that in spite of the COVID-19 pandemic, Banyan Capital Partners achieved record growth across its portfolio in 2020. The resulting increase in our aggregate portfolio value, persistent demand from our investor base and the confidence they have expressed in us has led to a broadening of our investment parameters to include larger businesses, and correspondingly increase the quantum of the initial investment we are capable of making as follows:
While we are expanding the universe of potential investment opportunities, it must be noted that our approach to investing and the characteristics of the businesses we target remain constant. Specifically, we are committed to a long-term investment horizon and are focused on partnering with strong management teams leading businesses exhibiting the following traits:
For more information, please refer to the attached updated two-page brochure.
If you are aware of, or work with a business that fits the criteria set out above, please don’t hesitate to reach out. We are optimistic that our economy will successfully navigate the COVID-19 crisis and emerge stronger than ever.
Jeff Wigle
Managing Director
Banyan Capital Partners
(416) 564-0737
[email protected]
A leading Canadian mid-market private equity firm, Banyan Capital Partners represents business strength, longevity and growth. Our success is rooted in our experience, relationships, and our proven reputation for honesty, respect and integrity. To highlight recent updates to our business and team, we are pleased to share with you the following update.
Scott Morrison, Associate, Business Development
We recently welcomed Scott Morrison to our team. At Banyan, Scott is responsible for leading business development initiatives, broadening our relationships with deal flow sources, and managing the deal flow pipeline. Prior to joining Banyan, Scott worked at Avison Young where he was responsible for sourcing and closing sale and lease transactions, as well as identifying new business opportunities. Scott has a Bachelor of Commerce (Honours) from Queen’s University and is a Certified Commercial Investment Member.
Continuing its growth trajectory, in April Rack Attack added two new stores in Los Angeles, California. The Santa Monica store, formerly a successful store under the Rack Solid banner, was acquired from its original owners as part of a succession plan. The Pasadena store represents the third new greenfield Rack Attack location in the last 13 months.
In April, Newcrete acquired Dawe’s Concrete Products Ltd., a provider of aggregates and concrete servicing the General St. John’s area. This is the second acquisition for Newcrete under Banyan’s ownership.
On April 1, 2019, Banyan’s interest in GWA was successfully acquired by Drive Products Inc.
Banyan Capital Partners is a private equity firm focusing on transition and expansion investment opportunities in middle-market businesses across North America. Banyan is an affiliate of Connor, Clark & Lunn Financial Group, a multi-boutique asset management firm that provides a broad range of distinct and independently managed investment products and services to individual and institutional investors. CC&L Financial Group and its affiliates are collectively responsible for the management of over $75 billion in assets.
For more information, download our corporate brochure or visit our website.