James Umlah, left, with John Pelton PHIL HOSSACK / WINNIPEG FREE PRESS

Crocus Investment Fund continues to beef up its organization as a prelude to its expected expansion into the managing of third-party institutional funds.

Last week, the $175-million labour-sponsored venture capital fund announced the hiring of John Pelton, the former CEO of Federal Industries Ltd., as its new senior vice-president, investment.

Crocus officials said although they were not able to announce details of any new funds for it to manage, they said the Pelton appointment means it will just be a matter of time before that is a reality.

"We would not be able to afford to do something like bringing on John Pelton if we were not fairly certain it would happen soon," said James Umlah, Crocus's chief investment officer and the man with whom Pelton will work closely.

Pelton served two stints with Federal Industries. For 13 years he was its chief financial officer, and after departing in 1987, he returned to the company in 1991 as its CEO. He served as chief executive during Federal Industries' transition from a diversified management company based in Winnipeg into a specialty metals company, called Russel Metals, based in the Toronto area.

"I'm thrilled to be back in Winnipeg and working at an organization like Crocus where everyone is so focused on a goal," Pelton said. "There is such a spirit here."

In addition to his association with Federal Industries, Pelton was also the president and chief operating officer of Financial Trustco Capital from 1988 to 1991. While with that company, Pelton worked closely with Ed Clark, who is now the CEO of the Toronto-Dominion Bank. The two became partners in a consulting firm called Greystone Partners.

In a telephone interview from his office in Toronto, Clark said, "John has an extraordinary mind. He is able to leap tall buildings that others wouldn't be able to do. He's able to connect dots that most people don't connect and he has the kind of personal integrity such that he cannot do things that are wrong."

Sherman Kreiner, president and CEO of Crocus, said, "We have looked for years for someone with senior investment skills to broaden and deepen our bench strength. While we have no new money that we can announce, we are actively and publicly in the market looking to attract that type of business and we should have something to announce in the next 90 to 180 days."

Umlah said Crocus management hopes to double the fund's size in the next couple of years and it expects to do that by leveraging its investment analysis and administrative infrastructure to manage private equity investing for third-party institutional money.

During the RRSP season that just closed, Crocus raised $22 million.

In addition to his contacts in Toronto-area capital markets, where he has been based for much of the past 15 years, Pelton also has access to a wide network of senior corporate managers that came out of the Federal Industries operations. Those people include Brock Bulbuck, the senior vice-president and chief operating officer of the Boyd Group; Gene Dunn, CEO of Monarch Industries; Harry Ethans, formerly a senior vice-president at CanWest Global Communications Corp.; and Bill Watchorn, the CEO of Crocus's competitor, the ENSIS Growth Fund.

"I had experience working with John at Federal and before that when I worked at Touche Ross and I saw him as the architect of some terrific deals at Federal," Bulbuck said recently. "John has one of the most brilliant financial minds that I have ever encountered. It's great that he's coming back to Winnipeg."