2012 = $75 million committed, 12 new deals, 7 exits

We announced our 12th deal of 2012 earlier this week (a different play on 12-12-12), an US$8.5 million financing for a Boston-based networking infrastructure company with a global client base. The company’s existing investor syndicate includes a prominent East Coast venture capital firm — and a new one to add to our growing U.S. VC partnership roster. Since we started doing U.S.-based transactions in 2009 and opened an office in California that Fall, I think we’ve worked with over 35 different U.S.-based venture capital firms to date.

The latest deal was larger than our average, but the extra financial resources of our new $178 million recirculating Fund IV gives us the flexibility to now go as high as $15 million per name. A quantum that should take care of the True Growth Capital needs of most fast-growing firms across Canada and the USA.

We’ve committed $75 million this year so far, with another $12 million in due diligence for early 2013. That would be our best “volume” year since our $87 million effort in 2007, which makes sense given the mayhem of 2008/09 and the pace of the economic “recovery” that has followed. Although 2011 beat 2007 from a fund revenue and net income standpoint, so who are we to complain about a weak recovery?

On the portfolio capital deployment front, California and Massachusetts are the two largest concentrations right now, followed by Ontario and Quebec. It makes sense, on balance, given the robust VC markets in those two U.S. States, plus our long history of providing capital to Central Canadian success stories as Airborne, Belair, OZ Communications, Top Aces and Ventus Energy. After a while, entrepreneurs and their ecosystem partners develop a good sense of the quality level of company you want to back.

As one U.S. V.C. says, “Wellington only wants to back my good companies”. He means it as the highest compliment, and we’ve put capital into his portfolio companies on four different occassions so far. Our limited partners appreciate it, too.

With seven loan exits in 2012, there’s still lots of capital left to deploy next year. That’s one of the happy problems with backing good companies; people keep snapping them up. Whether it be strategic buyers or commercial banks looking to dip their toes into the world of innovation lending.

Plus we had our first close on Fund IV; which was larger than the final $150 million close for Fund III. Something that not everyone in our industry gets to do in an era of shrinking institutional commitments to the VC space.

Thanks to all of our entrepreneurs, VC partners, banking pals and referral sources, 2012 looks to have been a success; and the Wellington Financial team is anxious to get started on 2013.

MRM