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Canadian institutional investors and HSBC Bank Canada have committed $300 million to HSBC Capital’s private equity funds, which HSBC Capital manages as the general partner. The objective of these funds is to increase substantially the value of investee companies over the anticipated holding period of the investment. We add value by introducing new capital and by providing both strategic and financial advice throughout the term of our investment.
Investment Profile
- Established companies with a history of revenue and cash flow
- Typically, traditional businesses engaged in services, manufacturing and distribution, however we consider transactions in many other industries
- Target companies will normally have demonstrated competitive advantages, diversified customer bases, and significant barriers to entry
- Generally private companies, but publicly-traded companies will be considered where it is believed the public markets are undervaluing a company and its prospects
- Committed and capable management teams
Types of Private Equity Transactions
- Management Buy-outs
- Leveraged Buy-outs
- Consolidation/Equity Plays or Growth Stories
- Pre-IPO rounds of Equity Financing
- Later Stage Turnaround Situations
Investment Structure
- Target buyouts or acquisitions with an enterprise value of $10 million to $150 million where we have the controlling interest alongside management
- Selectively pursue non-controlling equity investments where our investment size is between $5 million and $25 million
Return Expectations
- Commensurate with the risk of each investment
- Combination of capital appreciation, equity participation, dividend income and fees
Exit Strategy
- Typical investment horizon of 3 to 7 years
- Exit may be in the form of a strategic sale or merger of the business, refinancing or a public offering, or a repurchase of the Fund's position by the investee company
