New York-based Blackstone is bringing on Andrew Lapham, a former deal maker at Onex Corp., as an executive adviser.
Buyout giant Blackstone Group is coming to Canada, hiring a local private equity specialist to look for transactions north of the border.
New York-based Blackstone is bringing on Andrew Lapham, a former deal maker at Onex Corp., as an executive adviser. He will be based in Toronto.
Blackstone is the world's largest manager of so-called alternative investments, which include real estate and private equity. In total, it manages $272-billion (U.S.) of assets. Globally, it is behind some of the largest mega-buyouts in history, such as the $39-billion (U.S.) purchase in 2007 of Equity Office Properties. However, it has not had a big presence in Canada.
The firm's belief now is that Canada represents fertile ground for transactions, because the private equity business is not as big in this country as in the U.S. With the exception of Onex, many of the private equity firms that are in Canada do mid-sized deals. Blackstone, by contrast, would start with deals in the $300-million range and could go much higher. Its recent buyout funds are many times the size of even Onex's.
"Canada is a very attractive market," said Mr. Lapham. "It is sizable. Blackstone's idea, and mine, is that having a local presence gives you that much more of an opportunity to find great deals and identify great potential management teams and partners."
There are other U.S. private equity fund managers active in Canada. KKR & Co. plans a Calgary office to look for transactions related to energy. Bain Capital has also been busy in Canada, investing in companies ranging from Dollarama Inc. to Bombardier Recreational Products to parka maker Canada Goose.
While Blackstone has not historically done many deals in Canada, it does have investors here. For example, Canada Pension Plan Investment Board has committed $1.1-billion to Blackstone buyout funds, according to CPPIB's own disclosure.
"Canada is both a strategic market for Blackstone and home to many of our most important limited partner relationships," Joseph Baratta, Blackstone's global head of private equity, said in announcing Mr. Lapham's appointment. "It is critical to our firm to have a local presence in Canada."
Blackstone does not focus on any particular sector but looks for opportunities wherever it finds them. In addition to Equity Office, ranked the third-largest leveraged buyout in history, Blackstone's real estate arm was behind the $27.7-billion purchase of Hilton Hotels in 2007. Blackstone's private equity group has also invested in auto-parts makers, media outlets such as The Weather Channel and amusement parks, including Sea World, Legoland and Universal Studios.
Earlier this month, Blackstone agreed to pay $5.4-billion to buy Gates Global, a maker of a wide range of industrial products, from CPPIB and Onex.
The firm expects to have the same wide-ranging approach in Canada. However, given that Canada's economy has a huge energy component, and Blackstone has a fund that is specifically oriented to energy, the oil patch will certainly garner some of the firm's attention.
"It will be a diversified approach," said Mr. Lapham. "I would expect to see energy as a part of that."
Mr. Lapham departed from Onex about a year ago, and has since had his own firm, Northern Private Capital, where he had been looking for private equity transactions.