OMERS and Oxford Park to create fund offering loans to distressed firms

OMERS is teaming up with investment firm Oxford Park Group to create a $300-million fund to target distressed companies.

Oxford Park is expected to announce the pension fund's involvement on Tuesday as part of a reorganization that will see the firm change its name to PointNorth Capital Inc.

Oxford Park was created last year to focus on the debt and equity of companies that are in distress or undervalued. The Toronto-based firm is led by ex-Canaccord Genuity partners Phil Evershed and Barry Goldberg. Mr. Goldberg was the global head of mergers and acquisitions at Canaccord while Mr. Evershed headed global investment banking. Joining them as managing partner at PointNorth is Toronto businessman John Bitove, who has been involved in several investments with Mr. Evershed.

Capital commitments from the Ontario Municipal Employees Retirement System (OMERS) and the managing partners will provide PointNorth with more than $300-million, and the firm hopes to attract more involvement from other pension funds to bring the total to $1-billion. Pension funds such as OMERS, which manages about $77-billion in assets, have been seeking more alternative investments in recent years as returns from the stock and bond markets have weakened.

PointNorth will announce that it plans to target "investments in the debt and equity of Canadian companies that are experiencing financial or operational challenges, are in out-of-favour sectors or are otherwise in need of change. … We believe the Canadian market represents a compelling near-term investment opportunity, given global economic headwinds and Canadian structural factors,"

It will have a North American focus across all industries and it will offer capital for lending.

PointNorth has insisted that its objective is not to be an activist investor but to work with management for change.

Last summer PointNorth took a 5-per-cent stake in Markham, Ont.-based Extendicare Inc., which operates more than 100 senior-care homes in Canada, and pushed for changes.

In November, PointNorth planned a proxy battle at Extendicare in an effort to nominate its own slate of company directors. Two months later, PointNorth dropped its demand after the company agreed to add three PointNorth nominees to the board and remove two others.

PointNorth has said it will vote in favour of management's slate of directors at the 2016 and 2017 annual meetings.