Transaction would be structured as a continuation fund, sources say
by Preeti Singh
Centerbridge Partners aims to raise about $1 billion to give it more time to hold its minority position in Fairstone Bank of Canada, according to people familiar with the matter.
The transaction is structured as a continuation fund, according to the people, who asked not to be named discussing the private fundraise.
A prolonged slowdown in deals and initial public offerings has driven more private equity firms to pitch continuation funds so they can keep assets for longer. The final amount raised by Centerbridge will hinge on how many existing investors cash out, roll their commitments into the new vehicle or add fresh money with new terms.
Fairstone didn’t immediately respond to a request for comment. Centerbridge declined to comment.
Centerbridge — alongside Canadian entrepreneur Stephen Smith — acquired Walmart Canada Bank and rebranded it as Duo Bank of Canada in 2019. About a year later, Duo Bank acquired Fairstone Financial Holdings Inc. and the new entity rebranded to Fairstone Bank of Canada.
Last year, Fairstone and mortgage lender Home Trust Co. agreed to combine. Centerbridge and Ontario Teachers’ Pension Plan continue to hold minority stakes in the business and Smith’s firm, Smith Financial Corp., owns most of the combined entity.
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