Canadian PE firms strike deal with open-pit miner KMC

Fund of funds manager Kensington has committed C$1.9m to a 60-year-old Canadian oil sands mining company as part of a consortium including Calgary private equity firm TriWest.

Toronto-based Kensington Capital Partners has committed C$1.9 million ($1.9 million; €1.3 million) to KMC Mining, as part of a deal which has seen four firms pledge an undisclosed sum to the open-pit mining company.

KMC was founded in 1949 as a road and rail construction company but now foccuses its main business on the open pit mining sector of the Canadian oil sands. More recently it has been involved in site preparation work and haul road construction, including infrastructure work on the Muskeg River Mine and Suncor’s Millennium Mine.

The company’s other investors include Calgary-based private equity firm TriWest Capital Partners, the Alberta Investment Management Corporation, which manages roughly C$70 billion in Alberta public pension plans and other funds, and ATB Investment Management, an investment counselor and portfolio manager.

But only Kensington disclosed financial terms, as its funds were committed from the Kensington Global Private Equity Fund, a closed-ended fund of funds to be listed on the Toronto Stock Exchange.

In January, the same fund committed $2 million to Kilmer Brownfield Equity Fund, a private equity vehicle dedicated to the clean-up of environmentally-impaired “brownfield” properties in Canada.

Kensington, which raised $22.7 million from retail investors in the Global Private Equity Fund’s April 2007 initial public offering, is about to close a follow-on offering, a spokeswoman said.

TriWest, founded in 1998, closed its third fund in July 2007 on C$250 million ($252 million).