AGF to acquire majority of Kensington Capital Partners

Ted Liu

AGF Private Capital Inc., AGF Management Limited’s (AGF) private markets business, has signed definitive agreements to acquire a majority interest in Kensington Capital Partners Limited, as part of AGF’s strategic imperative to grow its private markets business.

AGF will make a strategic investment of $45 million and acquire a 51% ownership interest in Kensington.

Kensington will retain its investment and operational independence as part of AGF and will receive significant strategic support from AGF as part of the relationship.

Founded in 1996, Kensington has $2.6 billion in assets under management. Kensington employs a hybrid investment strategy across Fund of Funds, co-investments and direct investing.

Launched in 2014, Kensington Private Equity Fund (KPEF), an open-ended private equity fund, held investments totaling $2.0 billion, as of September 30, 2023, including investments in other Kensington managed funds, Kensington Alternative Strategy Fund, Kensington Venture Fund, L.P., and Kensington Venture Fund II, LP. KPEF has also committed $72.5 million to its new VCCI fund, Kensington Venture Fund III.

Kensington Private Equity Fund (KPEF) continuously raises capital on monthly basis. With additional AGF distribution channel, fundraising by KPEF may ramp up noticeably.

“We are very excited to partner with Kensington as we further build out our diversified private markets business,” said Ash Lawrence, Head of AGF Private Capital. “Kensington is a well-positioned private equity investment firm with an established brand and proven track record of performance. They have strong relationships that fit well within AGF’s target channels and have built a growth-oriented business that mirrors AGF’s goal of accelerating the growth of our private markets business.”

The transaction is expected to close in fiscal Q2 2024.

Kensington’s three Senior Managing Directors, Tom Kennedy, Richard Nathan and Eamonn McConnell, will continue to manage the business in their leadership roles, working closely with Ash Lawrence, Head of AGF Private Capital, and the Kensington Board of Directors.

AGF Private Capital’s fee-earning assets are expected to grow to $4.6 billion after the closing of the transaction, including $2 billion assets from InstarAGF Essential Infrastructure Fund I and II.

photo credit: Kensington Capital Partners

News Release

AGF Private Capital Inc. to Make Strategic Investment in Kensington Capital Partners Limited

Investment further expands AGF’s presence in the private markets with a proven private equity investment firm with $2.6B of assets under management while accelerating Kensington’s growth and distribution reach

Toronto – January 15, 2024 – AGF Private Capital Inc. – AGF Management Limited’s (AGF) private markets business – has signed definitive agreements to acquire a majority interest in Kensington Capital Partners Limited (Kensington), one of Canada’s leading alternative investment firms, as part of AGF’s strategic imperative to grow its private markets business.

Founded in 1996, Kensington has $2.6 billion in assets under management and an impressive 27-year history of successful performance and growth. The 40-member team has a proven track record of success managing private equity investments across mid-market buyout and growth strategies, and venture capital. Kensington employs a hybrid investment strategy across Fund of Funds, co-investments and direct investing, providing investors with well-diversified exposure to private markets. The company also has a history of innovation stemming from the development and launch of Canada’s first open-ended private equity fund over 10 years ago, the Kensington Private Equity Fund.

Kensington will retain its investment and operational independence as part of AGF and will receive significant strategic support from AGF as part of the relationship. AGF’s strategic investment aims to accelerate the growth of Kensington’s business while preserving the core values and entrepreneurial culture that has driven the success of Kensington’s investment programs to date. Kensington’s three Senior Managing Directors, Tom Kennedy, Richard Nathan and Eamonn McConnell, will continue to manage the business in their leadership roles, working closely with Ash Lawrence, Head of AGF Private Capital, and the Kensington Board of Directors.

“We are very excited to partner with Kensington as we further build out our diversified private markets business,” said Ash Lawrence, Head of AGF Private Capital. “Kensington is a well-positioned private equity investment firm with an established brand and proven track record of performance. They have strong relationships that fit well within AGF’s target channels and have built a growth-oriented business that mirrors AGF’s goal of accelerating the growth of our private markets business.”

AGF Private Capital’s strategic vision is to continue to build a best-in-class private markets business offering a diversified range of innovative solutions that meet the unique needs of financial advisors and their investors, family offices and institutions. The growth of the firm’s private markets business will further expand AGF’s investment capabilities and increase management and performance fee revenues, all of which are expected to contribute to earnings growth. The addition of Kensington and its expertise in private equity adds to AGF Private Capital’s existing private credit strategy and alternatives capabilities, expanding its channels of growth. AGF Private Capital’s fee-earning assets are expected to grow to $4.6B after the closing of the transaction.

“AGF Private Capital’s strategy is the ideal catalyst for Kensington’s further growth as we look to open doors to new strategies, relationships and regions,” said Tom Kennedy, Chairman and Senior Managing Director, Kensington. “AGF‘s size, scale, reputation and capital to invest in our growth lends the credibility and backing we need as we look to expand our investments, including the launch of additional innovative investment products.”

As part of the AGF family, Kensington will benefit from the size and scale of AGF’s $42.8B AUM business, its broad distribution reach, and access to its product development expertise and operating infrastructure. Kensington has looked at expanding into the U.S. and overseas markets, and AGF’s established relationships and distribution reach into those regions makes AGF the ideal partner to support the acceleration of Kensington’s growth initiatives.

The transaction is expected to be accretive to future adjusted EPS with the closing to occur in fiscal Q2 2024 subject to the receipt of certain regulatory approvals and closing conditions.

Under the terms of the definitive agreements:

AGF will make a strategic investment of $45 million and acquire a 51% ownership interest in Kensington.
Kensington employees will maintain a 49% ownership interest in the firm, with ownership broadly held by Kensington’s three Senior Managing Directors.
If certain near-term growth targets are achieved Kensington will receive an additional earn-out payment.
Under the leadership of the Senior Managing Directors, Kensington will maintain its investment decision making independence and will continue to operate as a distinct operating entity under the Kensington brand.
Ash Lawrence, Head of AGF Private Capital, Judy Golding, AGF’s President and Head of Global Distribution, and Ken Tsang, AGF’s Chief Financial Officer, will join Kensington’s three Senior Managing Directors on Kensington’s Board of Directors, with Ash Lawrence becoming Chairman.

Stikeman Elliot LLP acted as legal counsel and National Bank Financial Inc. acted as financial advisor to AGF. Goodmans LLP acted as legal counsel to Kensington.

About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three distinct business lines: AGF Investments, AGF Private Capital and AGF Private Wealth.

AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.

Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. With nearly $43 billion in total assets under management and fee-earning assets, AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

About AGF Private Capital
AGF Private Capital, AGF’s private markets business, combines diversified private alternative capabilities alongside participation as a core investor in bespoke and distinct opportunities that aim to deliver added value for the firm’s shareholders and clients.

About Kensington Capital Partners Limited
Founded in 1996, Kensington Capital Partners Limited (Kensington) is a Canadian alternative asset manager with offices in Toronto, Calgary and Vancouver. Kensington’s mission is to back good management teams to build great businesses, and in doing so, create top-performing investment solutions for investors. Kensington has assets under management of $2.6 billion, managed across several active funds covering venture capital, growth equity and mid-market buyouts.

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Michael Gotzamanis | Senior Manager, Corporate Communications
T 416-865-4153
C 416-276-2081
E michael.gotzamanis@AGF.com