Fulcrum to stay the course as Canada independent

Tue Nov 29, 2011 4:46pm EST
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By Pav Jordan

TORONTO (Reuters) - Fulcrum Capital plans to stay the course with its meat-and-potatoes approach to investing in resources now that it has completed a spin-off from HSBC and embarked as an independent Canadian private equity fund.

"What we have done in the past, and which I'm sure we would do in the future, is investments in these traditional industries where for the most part you don't need a PhD to understand them," David Mullen, the fund's chairman and managing partner, said in an interview. "Our target market is the middle market in Canada."

Oil and gas, mining and the companies that are servicing those industries is where Fulcrum sees the most opportunity.

"What we have seen are some opportunities to service the growth in parts of the Canadian economy right now," he said.

Mullen helped lead a management buyout of Fulcrum that was finally completed over the weekend. It was part of HSBC's spin-off of five regional private equity businesses that began 18 months ago.

London-based HSBC is one of many global banks that retreated from venture capital and private equity after the financial turbulence that triggered the global economic crisis of 2008-09.

In Canada Toronto Dominion Bank, the country's No. 2 lender, spun off Northleaf Capital Partners in 2009. Last year Royal Bank of Canada offloaded BlackBerry Partners Fund, a fund focused on mobile Internet and founded jointly with JLA Ventures.

Mullen said independence from HSBC won't change much in the day-to-day operations at Fulcrum, but it will make him and the company more flexible and agile in dealmaking and deal sourcing.   Continued...