TORONTO and MONTREAL, March 10, 2022 - Portage Ventures ("Portage") announced the sixth closing of Portage Ventures III LP (together with its parallel funds and master fund, "Portage III"), its third venture fund focused on fintech investments in the United States, Canada and Europe. Portage III has raised US$616M to date, making it one of the largest early-stage fintech-focused venture funds in the world. Portage's aggregate AUM, including Fund I and Fund II, has grown to $3.3B as of December 31, 2021. The fund received commitments from new and existing capital partners, including family offices, financial institutions, pension funds, and institutional investors worldwide.
The opportunity to invest in a Portage fund is also open to individual Canadian accredited investors for the first time. This access is available exclusively through Grayhawk Investment Strategies Inc. Portage expects to hold the final close for Portage III in April 2022.
"We are thrilled to welcome returning and new investors to the Portage family. Through these partnerships, we are building a truly global platform," said Paul Desmarais III, Co-Founder and Executive Chairman of Portage Ventures and Chairman and Chief Executive Officer of Sagard. "We have created a unique fintech ecosystem with deep expertise and a powerful network. We have a focused, thesis-driven approach, and we are delivering strong results." Portage has delivered a 57.5% and 54.9% Net Fund ITD IRR for Funds I (2016 vintage) and II (2018 vintage), respectively. Please see below for additional information on these performance measures.
Portage has steadily increased its geographic reach in the US and abroad since its founding in 2016. Portage's five largest portfolio investments by fair market value as of December 31, 2021, in Fund I and Fund II, are Wealthsimple, KOHO, Clark (Germany), Albert (US), and Alpaca (US). Additionally, Portage III has deployed close to $110M, with over half invested in US-based companies and the rest covering fintechs in Europe, Australia, Canada, and Israel.
"We are proud that in just over five years, Portage has grown to become a global leader in the early-stage fintech venture space, with 62 portfolio investments by three fund vintages in 13 countries. We look forward to continuing to empower entrepreneurs in reshaping financial services across our key investment verticals in wealth and asset management, insurance, and consumer and small business finance," said Adam Felesky, Co-Founder and CEO of Portage Ventures.
Portage delivers value above and beyond financing through access to seasoned advisors, as well as an expert partnership and value creation team providing support to portfolio companies and LPs in areas such as growth, enterprise sales, cybersecurity and commercial partnership opportunities.
New LPs investing in Portage III include HarbourVest Partners, Kensington Capital Partners and Meridian Credit Union.
They join previous LPs in Portage III, such as Caisse de dépôt et placement du Québec (CDPQ), Public Sector Pension Investment Board (PSP Investments) and Eldridge.
About Portage Ventures
Portage Ventures, the venture capital arm of multi-asset class alternative investment firm Sagard, is an early-stage investor dedicated to supporting financial technology companies. Its team has deep entrepreneurial and industry experience and provides its portfolio company founders with privileged access to its partners, in-house experts, and a broader global ecosystem. Portage Ventures has a presence in Montreal, Toronto, New York, San Francisco and Paris. To learn more, visit portagevc.com/.
This press release does not constitute an offer to sell or a solicitation of an offer to purchase any security. Offers and sales of interests in any fund or program may not be registered under the laws of any jurisdiction and will be made solely to qualified investors under all applicable laws.
In Canada, Portage III is offered only on a private placement basis to "accredited investors," as defined in National Instrument 45-106 Prospectus Exemptions or section 73.3 of the Securities Act (Ontario), as applicable, through a dealer registered or exempt from dealer registration, under an applicable rule of the Canadian Securities Administrators.
The aggregate AUM and Net Fund ITD IRR figures referenced above are estimates and subject to formal and final release which is expected to be on or about March 31, 2022.
Past performance of Fund I and Fund II investments are not necessarily indicative of the future returns of any current or future fund or program, including Portage III. There can be no assurance that any fund or program will be able to make investments similar to those made in Fund I or Fund II. The ultimate returns realized by any fund or program will depend on numerous factors that are subject to uncertainty. Accordingly, there can be no assurance that any return objectives will actually be realized. Any reference to portfolio investments contained herein are for illustrative purposes and may not be representative of all portfolio investments. It should not be assumed that any portfolio investments referenced herein are or will be profitable upon disposition.
Net Fund ITD IRR represents the annualized IRR on the total Limited Partners capital contributions, distributions, and the fund's net asset value after management fees, partnership expenses, and carried interest as of December 31, 2021. It is calculated based on the dates that limited partners are required to contribute capital to the fund and the dates the fund makes distributions back to its limited partners.
Portage Ventures II utilizes a credit facility (sometimes referred to as a "subscription line") to make investments and pay expenses and for other purposes to the extent permitted by the fund's partnership agreement. Such fund-level borrowing to fund investments impacts net IRR calculations because net IRR is calculated based on investor cash outlays to, and returns from, the fund and as such, returns depend on the amount and timing of investor capital contributions. Investors make correspondingly later or smaller capital contributions when the fund uses borrowed funds in advance or in lieu of calling capital. Accordingly, this fund-level borrowing results in higher net IRR than if capital had been called to fund the investments, even after taking into account the associated interest expense of the borrowing.
The returns presented herein include all returns generated by reinvested capital and profit. Without such reinvested capital, the returns presented herein could be lower.
Assets under management referenced above is the sum of the net asset value of venture capital funds, including uncalled capital commitments of those funds and unused leverage, and the fair value of assets held in co-investment vehicles managed by Sagard and uncalled capital commitments of those co-investment vehicles. This definition of assets under management is not based on any definition contained in our fund management agreements. Furthermore, our calculation may differ from the manner in which the U.S. Securities and Exchange Commission defines "Regulatory Assets Under Management" on Form ADV and from the similar definitions used by other asset managers.
This document does not constitute or form part of an offer to issue or sell, or of a solicitation of an offer to subscribe or buy, any securities or other financial instruments, nor does it constitute a financial promotion, investment advice or an inducement or incitement to participate in any produce, offering or investment. Any offer to purchase or buy securities or other financial instruments will only be made pursuant to an offering document and the subscription documents, which will be furnished to qualified investors on a confidential basis at their request for their consideration in connection with any such offering.