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July 17, 2024
PI Global Investments
Private Equity

AGF Private Capital acquires majority stake in Kensington Capital Partners for $45 million

The VCCI-backed firm will retain its “investment and operational independence,” the firms say.

Toronto-based firms AGF Private Capital and Kensington Capital Partners have signed a definitive agreement that will see AGF acquire a majority interest in Kensington for $45 million. 

Kensington’s three senior managing directors will continue to manage the business in their leadership roles. 

The transaction, which is expected to close in the second quarter of 2024, will see the employee-owned Kensington give up a 51-percent stake in its firm while holding the remaining 49 percent as well as  “its investment and operational independence” following the deal, according to a statement from the firms.

Kensington chairman and senior managing director Tom Kennedy hopes the deal will open doors to new strategies, relationships, and regions for the asset manager.

“AGF‘s size, scale, reputation, and capital to invest in our growth lends the credibility and backing we need as we look to expand our investments, including the launch of additional innovative investment products,” Kennedy said in a statement. 

Kensington has controlled a large amount of capital flowing through the Canadian tech ecosystem. It was one of four funds-of-funds managers selected by the Government of Canada for the Venture Capital Catalyst Initiative (VCCI) and the first of the four to announce that it had completed a first close of its third venture fund in April 2023.

RELATED:  VCCI-backed Kensington Capital Partners secures $158 million first close for third venture fund 

The $158-million CAD fund had three quarters of its capital set aside for fund-of-funds targets, 70 percent of which was anticipated to go to Canadian VC funds, with the remaining quarter reserved for direct investments in tech startups. 

Kensington was also selected to manage the Government of British Columbia’s BC Tech Fund in 2016, established to invest $100 million in BC-based information and communications technology, digital media, cleantech, and life science startups. According to Kensington, the BC Tech Fund has completed its investment period and has no remaining capital. 

Kensington says it has $2.6 billion in assets under its management, which is managed across several active funds covering venture capital, growth equity, and mid-market buyouts. Following AGF’s investment, Kensington will now benefit from AGF’s $42.8 billion in assets under management, as well as its distribution reach and operating infrastructure, the firms said in a statement. 

AGF says that it serves more than 800,000 investors with investment operations and client servicing teams in North America and Europe. The firm said that the addition of Kensington’s private equity expertise adds to its existing private credit strategy and alternative assets capabilities. 

“Kensington is a well-positioned private equity investment firm with an established brand and proven track record of performance,” said AGF Private Capital head Ash Lawrence. “They have strong relationships that fit well within AGF’s target channels and have built a growth-oriented business that mirrors AGF’s goal of accelerating the growth of our private markets business.”

Kensington’s three senior managing directors, Kennedy, Richard Nathan, and Eamonn McConnell, will continue to manage the business in their leadership roles while working closely with Lawrence and the Kensington board of directors, AGF said.

The transaction follows a slow year for the private equity world, according to data from McCarthy Tetrault’s 2024 private equity report. The value of global private capital raised between September 30, 2022 to 2023 was $1.16 trillion USD, roughly 14 percent lower compared to the previous year, the report said. 

Feature image courtesy Kensington Capital Partners.

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