Clairvest's Blockbuster Quarter Fueled by Profitable Exits

TORONTO, ON – February 11, 2026 – Clairvest Group Inc. (TSX: CVG) delivered a powerful performance in its third quarter of fiscal 2026, driven by a pair of highly profitable investment realizations that propelled its book value and net income sharply higher. The Toronto-based private equity firm announced that its book value surged 9% in the quarter, reaching $1.26 billion, or $91.66 per share, as of December 31, 2025.

Net income for the quarter was a robust $105.1 million, or $7.65 per share, a dramatic turnaround from the previous quarter's loss. This impressive result was primarily fueled by the successful divestments of two key holdings in its Clairvest Equity Partners VI (CEP VI) fund, showcasing the firm's ability to cultivate and exit businesses at substantial multiples. The strong quarter underscores Clairvest's long-standing strategy of partnering with entrepreneurs to build strategically significant companies and generate top-tier returns for its investors.

The Engine of Profit: Strategic Exits Yield High Returns

The quarter's standout performance was anchored by the monetization of two major investments. Clairvest and CEP VI completed the sale of their interest in F12.net, a Canadian provider of managed IT services. The transaction generated total proceeds of $164 million, representing an impressive 4.6 times multiple on the capital invested. Clairvest's direct share of these proceeds was $44.1 million, a significant gain over its carrying value of $23.2 million just one quarter prior.

Adding to the momentum, the firm also finalized an agreement to sell its stake in Acera Insurance Services Ltd., one of Canada's largest independent insurance brokerages. While the transaction officially closed after the quarter's end, its financial impact was reflected in the December 31 results. The sale yielded $325 million in cash and an $81.5 million promissory note for Clairvest and CEP VI. The private equity firm's portion amounted to $87.9 million in cash and a $22.1 million note. This exit generated a 3.0 times multiple on invested capital, turning a September 30 carrying value of $53 million into a December 31 value of $107 million for Clairvest's stake.

These successful exits validate the investment thesis of the firm's 2020 vintage fund, CEP VI. In a statement, CEO Ken Rotman commented on the firm's approach. “At Clairvest, our success is rooted in partnering with aligned and exceptional management teams, and our two most recent exits in CEP VI are a strong reflection of that approach: F12.net in the technology services sector and Acera in the insurance services sector," he said. "Both outcomes demonstrate our ability to help our entrepreneur partners achieve their ambitious growth plans and build strategically significant businesses."

A Strategic Pivot: Redeploying Capital into Gaming

While crystallizing gains from mature investments, Clairvest is simultaneously deploying capital into new opportunities. During the quarter, the firm, alongside its Clairvest Equity Partners VII (CEP VII) fund, announced a significant new acquisition: the operations of MGM Northfield Park, a regional racino near Cleveland, Ohio. The deal sees Clairvest acquiring the asset from casino giant MGM Resorts International for US$546 million in cash.

The transaction marks a major new investment in the gaming sector, an area where Clairvest has historically demonstrated expertise. The firm and its partners expect to invest approximately US$165 million in equity, with Clairvest's own portion anticipated to be around 25%. In a sign of commitment to the deal, Clairvest and CEP VII have already placed US$41 million into an escrow account. The acquisition remains subject to customary gaming and other regulatory approvals in Ohio, a standard hurdle for transactions in this highly regulated industry.

This move illustrates Clairvest's dynamic portfolio management—divesting from successful holdings in sectors like IT and insurance services to fund a large-scale entry into the U.S. regional gaming market, signaling a forward-looking strategy focused on identifying and acquiring assets with new growth potential.

Navigating Headwinds: A Look at Portfolio Realities

The stellar third-quarter results provide a sharp contrast to the challenges faced in the preceding quarter, offering a more complete picture of the inherent risks and rewards of private equity. The nine-month net income of $49.7 million was significantly tempered by a major setback reported in the second quarter of fiscal 2026.

Specifically, the firm took a $128 million write-down on its investment in Head Digital Works, an online gaming company operating in India. The write-down was necessitated by a "material adverse regulatory development" in the country, which effectively erased the asset's value on Clairvest's books. This event resulted in a net loss of $76.8 million for the second quarter, highlighting the vulnerability of investments to sudden and severe shifts in regulatory landscapes, particularly in emerging markets and dynamic sectors like online gaming.

The juxtaposition of the Head Digital Works write-down against the profitable exits of F12.net and Acera provides a transparent look at the volatility within a diversified private equity portfolio. It underscores how successful realizations are critical to offsetting inevitable losses and driving overall fund performance.

Capital Management and a Somber Farewell

Beyond its major transactions, Clairvest continued its disciplined approach to capital management. The company repurchased and cancelled 60,500 of its own shares during the quarter for a total cost of $4.3 million. This buyback, executed at an average price of $71 per share, contributed an additional $0.09 per share to the book value, signaling management's confidence that the stock was trading below its intrinsic worth.

As of December 31, 2025, the firm maintained a robust liquidity position, with total available cash of $336 million. This substantial cash reserve, representing approximately 27% of book value or about $25 per share, positions Clairvest to act on future investment opportunities as they arise.

Amid the strong financial report, CEO Ken Rotman also shared somber news of the passing of Lionel Schipper, a founding member of Clairvest's board. “Lionel was a founding member of Clairvest’s board, a trusted advisor and steadfast supporter of our company since its inception, offering thoughtful guidance, encouragement and oversight throughout his 39-year tenure at Clairvest," Rotman stated. "We will miss Lionel deeply. We extend our sincere condolences to Lionel’s family and loved ones, and we remain profoundly grateful for his enduring impact on Clairvest and on us as individuals.”