Two former managers of Ontario Teachers’ Pension Plan have launched Peloton Capital Management to invest in mid-market buyouts in Canada and the US.
Peloton’s two founding managing partners are Steve Faraone and Mike Murray. Both were recently managing directors at Ontario Teachers’ Pension Plan (OTPP), one of Canada’s largest pension funds. The two partners worked together for more than a decade at OTPP where they were active in the development of the firm’s direct private equity program, were members of the firm’s investment committee, and held responsibility for three (healthcare, consumer and financial services) of the firm’s six target industry verticals.
Messrs. Faraone and Murray are launching Peloton in partnership with Stephen Smith, Chairman, CEO, and co-founder of Canada’s largest non-bank mortgage originator, First National Financial Corporation. “Our vision is to establish Peloton as a leading Canadian private equity firm,” said Mr. Smith, who has taken on the role of Chairman of Peloton and has made an anchor commitment. “I’ve worked closely with Steve and Mike for almost a decade and am confident in their investment abilities and the potential for generating long-term, sustainable returns.”
Peloton will invest in Canadian and US-based companies that have from $10 million to $40 million of EBITDA and are active in the financial services, healthcare and consumer sectors. The firm sees their initial portfolio being comprised of seven to ten platform companies with hold periods ranging from 8 to 12-years.
“We believe there is a need in the North American private equity middle-market for a long-term, sector-focused alternative,” said Mr. Murray. “While the market is competitive and there is a lot of capital chasing deals, the opportunity is significant as we are addressing a white space with our unique approach.”
“At Peloton’s core is a culture based on the belief that effective collaboration produces better outcomes,” said Mr. Faraone. “We will embrace the same relationships-first philosophy that has been the cornerstone of our success throughout each of our careers.”
Jim Leech, the Chancellor of Queen’s University and the former CEO of Ontario Teachers’ Pension Plan, is taking on the role of Chair of Peloton’s Advisory Board.
Peloton Capital is headquartered in Toronto (www.pelotoncapitalmanagement.com).
© 2018 Private Equity Professional | November 1, 2018