Marty weinberg, the former president and CEO of Assante Corp., has joined forces with three high-rolling Winnipeg businessmen to form Canterbury Park Capital, a private equity fund.

Weinberg — along with Leonard Asper, CEO of CanWest Global Communications Corp.; Asper’s older brother David, executive vice president of CanWest; and Bob Silver, president of local jeans manufacturer, Western Glove Works Ltd., and co-owner of the Winnipeg Free Press — has just released the offering memorandum for the $200 million-$300 million fund.

The quartet will be joined by an as-of-yet-unnamed private equity manager and his team in Toronto. Weinberg says the Toronto team has an extensive track record over the past decade, during which time it has accumulated a 45% rate of return.

“This will be the marriage of an established team of successful operators with a team of experienced private equity managers,” Weinberg says. “We think we have a better solution than the alternatives out there in this space.”

Weinberg calls the fund a “buyout” fund and says the strategy is to purchase a controlling interest — or a minority position in which there is a chance of obtaining controlling interest in the near future — in private companies, and actively managing them before selling them off or taking them public.

The quintet is ponying up $70 million between them. Weinberg says the fund is in the fundraising stage but it has already received favourable feedback from potential investors, including pension funds and major financial institutions. There is also a chance that select high net-worth investors will participate in the fund, he says.

Weinberg says Canterbury Park will be able to invest about $1 billion in companies with the money it will raise. The plan is to make 10 to 15 equity investments in the $10 million-$50 million range, he says.

The company’s name is derived from Canterbury Lane, the street on which the Aspers own property in Palm Beach, Fla., and Park Boulevard, the swanky south Winnipeg thoroughfare that both Weinberg and Silver call home.

Weinberg also announced recently that he is re-entering the world of serving high net-worth Canadians through the Canadian operations of Loring Ward International Ltd. , although he is quick to note his role there is primarily as a shareholder.

“Canterbury Park is my full-time job,” he says, adding that it makes sense that he, and not the others in the group, should run the company. The other partners will meet regularly and essentially act as the board of directors and investment committee. “I was the only one who was unemployed,” he says with a laugh.

Financial engineering

Weinberg adds that the challenge is that a lot of money has been chasing private companies in recent years and that has caused the price of many of them to rise. That drastically reduces the chance of buying private firms at significant discounts and selling them at a later date or taking them public at higher multiples — “financial engineering,”
Weinberg calls it.

But Canterbury Park will add value by exploiting the group’s extensive operating expertise and Rolodexes, he says.

He notes that the fund will look at virtually every industry, including financial services, retail and communications, in which it has obvious expertise, but will avoid real estate, oil and gas, and other primary natural resources.

The plan is for all the partners to use their considerable connections and relationships to help find opportunities before other funds do.

David Asper says both he and his brother see possible deals in the course of regular business activities.

“We see opportunities and we’ve been approached about opportunities. But it [has] been a bit frustrating because we haven’t been able to act on them,” he says.

He says that when the idea of Canterbury Park was first presented to the two of them, it reminded them of one of the ventures undertaken by their late father, Izzy. In the 1970s,
Izzy and Gerry Schwartz formed CanWest Capital, which was a closed-end fund that raised money, acquired businesses and either sold them or grew them. The pair split up in
1977 and the spinoffs eventually became CanWest Global and Onex Corp., two of the biggest companies in Canada.

“At our first meeting as a group, we sat down and talked about broad objectives and goals. Leonard and I looked at each other, and we knew immediately that we had heard this story before,” David Asper says.

@page_break@Weinberg says Canterbury Park will seriously look at opportunities in Western Canada and Manitoba, in particular.

“We know the lion’s share of [private equity] firms are in the East and have done their hunting in the East. We believe there are opportunities in Western Canada because it is underserved,” he says, adding he expects 80% of Canterbury Park’s deals will be made in
Canada.

He says Canterbury Park also plans to set up strategic relationships with centres of influence, such as accounting, legal and valuation firms, to help it gain an edge.

“It is a formal program in which we hope to negotiate a deal to get the first crack at [potential investments],” he says.

Canterbury Park will have offices in Winnipeg and Toronto, a satellite office in Calgary and 10 to 15 employees, excluding the founders.

Silver says that he joined the group because he saw a need to have another Western
Canadian company doing business in private equity. Ideally, because the firm is
Manitoba-based, some of the money will flow into the province and boost economic development, he says.

“It’s one thing to buy and sell companies. The real issue is to make them profitable. And, if they are profitable, then make them more profitable,” he says.

Weinberg says he could have started up a company along the lines of his previous creations, Assante and Loring Ward, firms that targeted high net-worth clients in the financial services world in both Canada and the U.S. But he wanted to do something different.

“I’ve decided to focus on the parts of my previous life that I enjoyed the most,” he says.
“We’re taking a broad view of the world, identifying opportunities and executing a strategy that will allow us to become a dominant player in the field.” IE