John Ruffolo’s private-equity firm is officially in business after raising money from five Canadian institutions, seven months after the Bay Street financier was nearly killed in a traffic accident.
His Maverix Private Equity last week received funds from CAAT Pension Plan, British Columbia Investment Management Corp., Bank of Montreal, Canadian Imperial Bank of Commerce and Mattamy Asset Management to anchor its first, US$500-million fund.
Mr. Ruffolo wouldn’t disclose the size of their investment but said it was enough for Maverix to start investing, targeting later-stage, fast-growing Canadian companies using technology to disrupt traditional sectors. Maverix has already made its first financing offer, he said.
He expects to reach a “first close” target of US$350-million by mid-June after receiving pledged funds from wealthy individuals and families. The Maverix team includes fellow managing partner Mark Maybank, the former president of Canaccord Genuity; partner Nagar Rahmani, ex-principal with Kensington Capital Partners; and past Ontario health minister Eric Hoskins. The advisory board is stacked with well-known Canadian entrepreneurs, including former BlackBerry co-chief executive officer Jim Balsillie, Mattamy founder Peter Gilgan, Canada Goose CEO Dani Reis, Dragons’ Den star and financier Arlene Dickinson and Toronto Raptors founder John Bitove.
“We’re impressed with the team,” said Adam Buzanis, director of private equity with CAAT, a 70,000-member pension fund with $15.6-billion in assets. “It’s a unique mix of talent in Canada that should enable Maverix to source and execute on highly sought-after” deals.
Ms. Dickinson called the anchor funding “a milestone for the capital ecosystem in Canada and the businesses it will support that will ultimately create success for the nation. I have no doubt John will create a multibillion-dollar platform here.”
Mr. Ruffolo set out to start a private-equity firm after departing as head of OMERS’ venture capital arm in late 2018. His arrival at the pension fund seven years earlier was well-timed, as smartphones, social networks and software delivery over the internet gained traction, creating opportunities for entrepreneurs.
U.S. venture capitalists were on the hunt in Canada but Mr. Ruffolo was determined to get into the hottest deals and establish OMERS as a leading institutional investor in Canadian tech. On his watch, OMERS backed rising Canadian stars Hootsuite, Wave and D2L and won the lead on Shopify’s last funding before its 2015 initial public offering.
But he saw market dynamics changing as capital flooded Canada and companies scaled up. Mr. Ruffolo believed the next generation of winners would use technologies such as 5G, blockchain, machine learning and robotics to disrupt established sectors such as financial services, health care, transport and logistics, and retail. “John’s advantage is that he knows our current tech ecosystem intimately,” said Mr. Balsillie.
With Maverix, Mr. Ruffolo intends to address a gap in Canada’s private-capital funding ecosystem between late-stage venture capital and buyout-focused private-equity funds, focusing on fast-growing companies with proven business models and significant revenue. It’s a space occupied by a handful of Canadian firms, including Georgian, Inovia Capital, OMERS, and Round 13 Capital, though foreign investors dominate.
“There are clearly gaps in growth equity in this country,” said CIBC CEO Victor Dodig. “If we’re going to build a resilient Canada after the pandemic ... there needs to be a durable element of long-term investment and growth.” Backing the kinds of companies Maverix is targeting “is one element of doing that. That is is why we’ve agreed to participate as an investor.”
But fundraising efforts were delayed after Ontario Teachers’ Pension Plan pulled out of talks to anchor the fund in April, 2019, and then by the pandemic. Maverix was gearing up for a first close in fall 2020 when Mr. Ruffolo was hit by a jackknifed truck Sept. 2 while cycling.
He sustained severe injuries, including a fractured pelvis and shattered lower spine; doctors at first weren’t certain if he would survive. After initially being told his legs would be paralyzed, Mr. Ruffolo had an operation last fall and undertook physiotherapy that helped him regain motion and feeling above his knees. By late October he was fundraising again.
“It’s already not hard enough to raise a fund in Canada, and trying to then do it through COVID-19, just to really prove it wasn’t hard enough I needed to get run over by a vehicle,” Mr. Ruffolo quipped. “I was told on many occasions I was thinking too big” with Maverix. “If you just stay focused and not let things distract you, it’s very possible.”
Mr. Buzanis said Mr. Ruffolo’s “resilience and focus while dealing with the accident and recovery process has been nothing short of incredible.”