Toronto-based private equity firm TorQuest Partners has raised $2.1-billion from outside investors for its sixth fund targeting middle-market companies, sending a hopeful signal as some of its industry rivals have struggled to attract new money in a sluggish market for deal-making.
The TorQuest Partners Fund VI surpassed the firm’s $1.75-billion fundraising target and hit its cap on external commitments. It is 53 per cent larger than TorQuest’s last fund, which raised $1.38-billion, and does not yet include TorQuest’s commitment as general partner.
The fund is anchored by contributions from existing investors in TorQuest, including pension funds, sovereign wealth funds, endowments and others. But the firm said in a statement that the fund also attracted a significant number of new high-net-worth individual investors.
TorQuest built the fund quickly, holding its final closing on fundraising less than nine months after it attracted the first $500-million in an initial round. That contrasts with the difficulties many smaller and medium-sized private equity firms have had with fundraising of late. Deal-making has dried up, and some large institutional investors that have been strapped for liquidity or that have overallocated to private equity have chosen to concentrate the money they have available with the largest firms.
“All of us at TorQuest are beyond appreciative of the continued support and confidence our limited partners have shown in us, particularly in this challenging fundraising environment,” said managing partner Eric Berke in a news release.
Earlier this year, Toronto-based private equity firm Onex Corp. paused fundraising on its largest private equity fund, choosing to wait for market conditions to improve, though it is still raising money for other strategies.
TorQuest typically invests in mid-sized companies, seeking to revamp them with changes to governance, strategy and operations, and building them up with injections of capital and acquisitions. Its current investments include Canadian fast food chain A&W Food Services of Canada Inc. and Calgary-based information technology staffing company S.i. Systems.
Companies everywhere are facing a tougher operating environment, with slowing economic growth and high interest rates driving up borrowing costs.
“We also recognize that we are facing many macro headwinds and uncertainties today, all around the globe,” said TorQuest senior managing partner Brent Belzberg, in a statement.
Even so, he added, “some of our best transactions were undertaken during periods of tremendous uncertainty.”
Torys LLP acted as counsel for the fund.