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Power Corp. of Canada’s Sagard Credit Fund Makes First Close

The Canadian firm’s investment arm gathers outside capital for the first time.

  • By Julie Segal

Power Corp. of Canada’s Sagard Holdings has attracted $260 million of investor commitments for a direct lending fund that it’s raising.

Sagard Holdings, an investment arm of Power Corp. that was founded in 2005, invests in small and mid-sized public and private companies in North America. The first close on commitments for the new fund, Sagard Credit Partners,marks the first time Sagard Holdings in North America has raised capital from outside investors, according to a company announcement, expected to be released Thursday.

Sagard — which received commitments from Healthcare of Ontario Pension Plan, BRK Capital, Walter Financial and a large Canadian pension plan — said the firm aims to raise an additional $500 million from institutional investors, including family offices.

“Our primary focus will be lending to family and founder-owned companies as well as smaller public companies,” Adam Vigna, managing partner and chief investment officer of Sagard Holdings and Sagard Credit Partners, said in the announcement. Vigna joined the firm in 2016 from the Canada Pension Plan Investment Board.

[II Deep Dive: Carlyle, Others Staff Up Private Debt Groups]

Asset managers have raised record capital for private debt funds, including those that provide direct lending for smaller companies that had traditionally turned to banks for financing, according to Preqin. Since the financial crisis, institutional investors have plowed money into these types of funds, which offer higher yields than government and corporate bonds.

Asset managers raised $107 billion for 136 private debt funds in 2017, surpassing the previous high mark of $100 billion in 2015 according to Preqin.

Power Corp. is a conglomerate with interests in companies in industries that include financial services, renewable energy and communication, according to its website. The company owns one of the largest life insurance companies in Canada, Great-West Life Assurance Co., as well as insurance, retirement and asset management operations in the U.S., including Putnam Investments.

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