2014: Year in Review

2014 was a busy year for our firm.

It all starts with “The Funnel”, and the team hit new highs in two of the important categories: Opportunities and Financial Reviews. We didn’t break any records on the Term Sheet front, which I took to speak to the middling North American economy.

We closed 11 transactions all told, committing $95.2 million of our $200 million in recirculating equity capital to growth companies in the USA and Canada. That $95 million figure tops our previous $78 million high in 2007. If you include capital on transactions that we led and syndicated to other players, the figure grows to more than $105 million for 2014 (versus $90M in 2007).

By geography, nine of those transactions were for U.S.-based firms in places such as California, Georgia and New York, while the remaining two were for VC-backed firms in British Columbia and Quebec. (If you’re wondering about the US weighting, blame it on the competitive practices of the Business Development Bank of Canada and its cheap government funding.)

As years go, it was also the most active on the exit front as buyers of high quality tech firms continued to add talent, customers and IP via M&A transactions. In the end, we saw ten complete exits in seven different States/Provinces during 2014…and those that didn’t result in an M&A deal wound up in the portfolios of a few asset-hungry commercial banks (see prior representative post “Bloomberg: Regulators stand by while U.S. bank lenders get footloose” May 14-14). Our Limited Partners recognize that an exit is an exit, since each speaks to the credit quality of our loan portfolio.

The portfolio still grew, despite the huge surge in exits versus 2013, and with two new Partners in our San Jose office, everyone is excited about what 2015 will bring.

Speaking of LPs, our institutional investors saw warrant gains hit our P/L in five different months last year. In aggregate, when you add up every dollar between our Funds III and IV, it was our best year in more than 10 on that front. With an ever-larger portfolio, warrant gains are something that one would expect; but seeing them hit the tape certainly speaks to the diligence that our team performs at the front end of the process.

On the performance front, Preqin recently branded the firm one of the most consistent performing funds in the world in its 2014 Private Equity Report (see prior post “Wellington Financial named to Preqin’s list of ‘Consistent Performing Fund Managers‘” Feb 24-14). However, as you might have heard me say before: It’s all about tomorrow.

Best wishes to all for a healthy and fulfilling 2015.

MRM