Opening a door to the U.S. market

Wellington Financial announced earlier today that we have opened the lending door to U.S.-based companies. With the signing of a specific CDA/US tax treaty, Canadian-based specialty finance firms can now successfuly compete for cross-border lending opportunities. With 11x the GDP of Canada, the U.S. is an obvious and attractive next step in our firm’s growth. Just last quarter, for example, about US$5 billion of new capital went into U.S.-based venture deals, versus maybe $300 million in Canada.

We’ve been busy “up here”, with $180 million of leads and syndicate positions across 26 closed financings over a 26 month period since Fund III had its final close in October 2006. But with the acute shortage of growth capital across North America, this seems like the perfect time to grow the footprint.

Here is the text of the press release that went out earlier today:

Wellington Financial LP, a privately held specialty finance firm, today announced that Wellington Financial Fund III is now providing growth capital to U.S.-based companies.

Wellington Financial provides operating lines of credit, term, venture and amortizing loans up to US$50 million. Target clients generally have trailing revenues in excess of US$5 million. Wellington Financial specializes in term and operating loans for companies focused in the knowledge-based sector of the economy, but also provides traditional subordinated debt and “stretch senior” lending across most industries. Founded in 2000, Wellington Financial is currently deploying a US$400 million investment program via its institutional third fund.

Earlier this year, Wellington Financial announced that it had raised an additional C$24.1 million of limited partner commitments from two new Canadian-based institutions, increasing Fund III to C$150 million in size. Launched in late 2006, Wellington Financial’s Fund III has led or participated in 26 new financings, providing C$180 million of new capital to Canadian-based companies.

“There is no credit crunch at our firm,” said Mark McQueen, President and Chief Executive Officer of Wellington Financial. “In light of the challenges in the North American capital markets, now is the right time to offer our True Growth Capital® in the United States. Many American CFOs prefer our term debt model to the traditional amortizing loan structure, and we are delighted to now be able to serve their needs in their home currency.”

Added Mark Usher, Partner at Wellington Financial, “The vibrancy and energy we experienced last week at the Florida Venture Forum speaks volumes about the inherent opportunities in the U.S. market.” Over the past few years, Wellington Financial has financed companies in the portfolios of many U.S.-based venture capital firms, including First Capital Group, Kodiak Venture Partners, Insight Venture Partners, VantagePoint Venture Partners and Woodside Fund. Over the next eight weeks, Wellington Financial will be attending / sponsoring growth capital conferences in Atlanta, Boston, and Raleigh.

MRM