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| Canada Wire |
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| August 30, 2021 |
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| CPP’s Suyi Kim profiled in Buyouts 2023 Women in PE, SVB collapse creates opportunities for venture debt, Airex Energy nabs $38m Series B |
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Happy Monday!
Readers of PE Hub Canada Wire will know the wire was not issued last Monday. Apologies – it was due to me. Yours truly had surgery during the week of March 6, followed by a surprisingly rough recovery. Thanks to those who provided kind wishes and support.
Buyouts 2023 Women in PE: As we do every year, Buyouts devoted the March magazine to the topic of women in private equity. In it, we celebrated the dealmakers who have made partner, or managing director, or have founded their own firms, inspiring other women who navigate a male-dominated industry.
This year, a prominent Canadian LP was profiled: Suyi Kim, global head of private equity at Canada Pension Plan Investment Board (pictured above). In my interview with Kim, I learned she was no stranger to gender discrimination as a young woman growing up in Korea..
On entering Seoul National University to study economics, Kim was asked why she wanted an education that had nothing to do with getting a “suitable husband.” “Why not?” she asked. This determined mindset has guided Kim over a two-decade career in private equity and helped her rise in an industry with few female role models.
Kim first considered a PE career while obtaining an MBA at Stanford. “I was intrigued by investments,” she says, especially in private markets where “hard work offered a better chance of getting results.” In 2002, she joined Carlyle, becoming the “first female private equity professional in South Korea.”
Kim next went to Ontario Teachers’ Pension Plan before joining CPP Investments in 2007 and establishing the pension’s first global office in Hong Kong. Promoted to head of Asia-Pacific in 2016, she grew the regional PE business, cutting mega-deals like the 2017 acquisition of Nord Anglia Education for US$4.3 billion. In 2021, Kim was appointed to CPP’s top PE job, giving her oversight of a $141 billion strategy of direct, fund and secondaries investments.
While progress has been made, Kim says gender discrimination persists, especially in the form of “unconscious bias.” She recalls negotiating a deal a year ago, when a male business executive insisted on talking to a senior person. “I had to tell him three times I was that person.”
As the world’s largest investor in private equity, CPP has a special responsibility to promote diversity, Kim says. “My job is to generate strong and long-term gains” and one way of achieving that is having “diverse views on investments.”
CPP does this as an LP and as an owner of private companies. “For both, it starts with asking the questions. All of the sudden, they have to answer,” Kim says. Then, the focus is on setting up the right expectations and policies in areas like board effectiveness and tracking the results.
CPP also tries to set an example, seen in the more than 30% of a 166-person PE team who are women. “We still have more to do,” Kim says, including creating more senior-level female representation.
Pointing to a recent McKinsey & Company study showing low gender diversity in private equity’s upper ranks relative to corporate America, Kim says, “we have a long way to go in our industry.” She is encouraged, however, by a “strong pipeline of young people” who can help realize a better balance.
Kim lives with her husband in Toronto. Outside of work, she sits on the board of JA Korea, the Korean branch of Junior Achievement, and practices meditation.
Be sure to check out some of the other interesting profiles in Buyouts 2023 Women in PE! Subscribers can read my Buyouts’ story here.
Canadian VC deal of the week: This week, there was news of yet another energy transition startup at the centre of a major deal. Airex Energy, a Laval, Quebec-based provider of decarbonization solutions, announced securing $38 million in Series B financing. Cycle Capital led the round, with participation from other backers that included new investor Fonds de solidarité FTQ and existing investors Investissement Québec, Desjardins-Innovatech and Export Development Canada.
Airex produces biochar, biocarbon and biocoal, each of which has multiple applications relevant to climate change. The funds raised will be used for growth initiatives, including a project that aims to boost biochar production in Europe and North America by 2035. “From the outset, we have been convinced of decarbonization’s potential, particularly in polluting industries, as well as of Airex’s patented technology,” Andrée-Lise Méthot, managing partner of Cycle Capital, said in a statement. See Venture Capital Journal’s news brief here.
Canadian PE deal of the week: Onex this week announced a plan to reduce its long-term stake in Celestica, a Toronto-based electronics manufacturing services provider. The firm said it would convert its multiple voting shares to subordinate voting shares on a one-for-one basis in about six months. “Celestica and Onex have shared a productive relationship for over 25 years. The planned conversion of Onex’ MVS and the simplification of Celestica’s voting structure is the natural next step in the company’s evolution,” said president Bobby Le Blanc in a statement.
Onex acquired Celestica in 1996 from IBM for US$550 million. During its ownership period, Celestica pursued a number of growth initiatives, the highest-profile of which have been acquisitions. In 2021, for example, the company acquired PCI, a Singapore-based electronics manufacturing services provider, from US private equity firm Platinum Equity for US$306 million. Check out PE Hub’s news brief here.
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| Top Scoops |
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Filling the gap left by SVB: The collapse of Silicon Valley Bank has rocked the startup and venture capital world. As a recent Pitchbook report said, SVB was more than a bank to the technology sector: “Over 40 years, it had developed a product suite tailored for the industry – mortgages to executives, credit lines for VC funds to keep capital flowing, and venture debt to startups deemed uncreditworthy by larger lenders.”
Startups and VCs in Canada are likely to agree with this assessment. The loss of SVB is especially hard at a time when the technology sector is reeling from a market correction caused by beaten-down public stocks and a tough macro-economic environment.
However, “in the midst of every crisis lies great opportunity,” Venture Capital Journal’s Lawrence Aragon wrote this week, invoking words often attributed to Albert Einstein. As we consider the failure of SVB, Aragon wrote, we should also give thought to the "enormous opportunity" presented to venture debt providers.
Aragon interviewed Zack Ellison, who is in the market raising a venture debt fund for Silicon Valley’s Applied Real Intelligence. Ellison told Aragon that he excepts other banks will not fill the void left by SVB. “For non-bank lenders, this is a once-in-a-generation event,” he said. “Two-thirds of the supply of [bank] venture debt is now offline – and it is not going to come back quickly.”
Subscribers can read Venture Capital Journal’s story here.
In Canada, there is also a debate taking place about how to fill the gap left by SVB. For example, Jérôme Nycz, executive vice-president at BDC Capital, this week told Bloomberg that startups which obtained temporary bridge financing from SVB are now scrambling to figure out how to refinance obligations when they come due. He said BDC, which has stakes in 124 VC funds and more than 320 companies, “is ready to work with the different parties in the market to make it a smooth transition."
Read Bloomberg’s story here.
That’s it. Have a great day! Please get in touch with me with your feedback, story ideas, tips, etc., at kfalconer@buyoutsinsider.com or find me on LinkedIn .
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| Bitcoin infrastructure company Blockstream snags $210m |
| Victoria, British Columbia-based bitcoin infrastructure company Blockstream is with its latest financing joining a slew of Canadian technology enterprises that have reached billion-dollar valuations during the pandemic, the Globe and Mail reported. More... |
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