OMERS Ventures tech fund eyes C$300 million fundraising in 2017

[January 26, 2016]  By Matt Scuffham

TORONTO (Reuters) - OMERS Ventures, one of Canada's biggest venture capital firms, plans to raise up to C$300 million ($210 million) through the launch of a third fund in 2017 to invest in early stage technology firms, its chief executive officer said on Monday.

The OMERS Ventures fund was set up in 2011, raising C$210 million in its first round of funding. It raised a further C$260 million last year from investors including Bank of Montreal <BMO.TO>, Cisco Systems <CSCO.O> and its parent, Canadian pension fund OMERS.

"I would say by early 2017 we'll be fundraising for fund three. A range between 200 and 300 million Canadian dollars is where we think, based on our strategy, we can deploy that money very effectively and maintain a very high bar of quality," CEO John Ruffolo told Reuters.

Ruffolo said OMERS Ventures had already received approaches from potential investors looking to take part in the next fundraising but would look for partners who can contribute expertise as well as finance.

"We'd like to have like-minded strategic investors who think with the same long-term horizon," Ruffolo said.

He added that he anticipated OMERS Ventures expanding to eventually have around C$1 billion of assets under management.

OMERS Ventures is the venture capital arm of the Ontario Municipal Employees Retirement System (OMERS), Canada's sixth largest pension fund with assets under management worth C$73 billion.

OMERS was the first Canadian pension fund to directly invest in start-up companies and remains the only major pension fund which adopts that approach. Others prefer to focus on larger investments and view start-ups as risky and more likely to fail, pension experts say.

Ruffolo said OMERS Ventures only invests in companies it believes can eventually be listed on stock markets through initial public offerings (IPOs). So far it has only listed one of the 26 firms it has invested in - Canadian e-commerce company Shopify <SH.TO>, which listed in Toronto last year. Its shares have nearly doubled in value since the listing.

The fund takes a long-term approach to investing, meaning it can support businesses through extended period of development without needing to generate short-term returns.

Ruffolo said he did not expect more companies in OMERS Ventures' portfolio to list until 2017. Social media software provider Hootsuite, educational software provider D2L and online building materials retailer BuildDirect are seen among those closest to listing, according to market sources.

(Reporting by Matt Scuffham; editing by Bernard Orr)

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