Canada's Venture Capital & Private Equity Association has awarded its “deal of the year” honors to GrowthWorks Canadian Fund's 2002 investment in Galleon Energy and HSBC Capital (Canada)'s 2004 investment in Encore Group.
GrowthWorks' Galleon exit last year netted a 7.6x return and generated an international rate of return of 134 percent. The firm made an initial investment of $8 million (€5.7 million) in Galleon, giving it a 90 percent stake in the company, followed by a Series B investment of $4 million a year later. Galleon held its initial public offering in September 2003 and raised $10.25 million. In 2006, the company bought oil and gas properties in the Peace River Arch area of Alberta. The property ended up being extremely profitable, said David Levi, GrowthWorks' president and chief executive officer, and ultimately drove the company's share prices up considerably.
HSBC's exit from Encore resulted in an internal rate of return of 231 percent and a 10x return on investment. The firm created the Encore group of metal service center companies in March 2004 through the buyout of Corus CIC and Corus America businesses. It then sold Encore to Reliance Steel & Aluminum in February 2007. HSBC could not be reached for comment on the deal.