TORONTO, March 9, 2017 /CNW/ - Canada's leading banks
and insurance companies today announced their intent to create a
fund to invest up to $1 billion in
Canadian businesses over the next decade to bolster growth and
innovation.
The Canadian Business Growth Fund will make investments in
small- and medium-sized Canadian companies seeking long-term,
patient, minority capital to finance continued growth and to allow
the scaling up of existing operations. Typical investment amounts
in each company will range between $3
million and $20 million. Importantly, the fund will
facilitate mentorship and access to talent pools to help these
businesses achieve their full potential.
The fund is expected to have initial capital commitments of over
$500 million, with the possibility
for future contributions of up to $1
billion in future years, depending upon both demand for
investment and the fund's performance. Initial participants
include: BMO Financial Group, CIBC, Royal Bank of Canada, Scotiabank, The Toronto-Dominion Bank,
Manulife, Sun Life Financial, Great-West Life, National Bank of
Canada, HSBC Bank Canada, ATB
Financial, Laurentian Bank of Canada, and Canadian Western Bank. Other
institutions are considering involvement and a broad range of
financial institutions will be able to invest in the fund when it
is formed.
The fund will operate as an independently managed entity,
supported by its investors with its own board of directors and
management team, with an objective of having offices and personnel
across Canada. The board will be
comprised of independent directors and representatives from the
initial investors. The Fund will begin a search for an independent
chair, along with a chief executive officer, with the intention to
have an executive team in place to start deploying capital within
the next 12 months.
The executive team will also be tasked with developing an
advisory network to provide mentorship, thereby closing some of the
knowledge gaps preventing many mid-sized companies from achieving
their full growth potential at home and globally. The aim is to
help business founders maintain effective control of their
companies to execute on their vision as they grow and expand.
This announcement follows the publication of the second report
from the Minister of Finance's Advisory Council for Economic
Growth, which identified a gap in the Canadian market for long-term
capital and recommended the creation of a private sector-led growth
fund for minority equity stakes in companies. One of the goals of
the Fund is to ultimately help Canadian companies grow outside of
Canada, creating a vibrant,
innovative and diversified economy that will spur the creation of
jobs and growth for our country.
A further announcement will be made in due course.
BGF Board Representatives: ATB Financial – Curtis Stange, Bank of Montreal – Nadim
Hirji, Scotiabank – Philip
Smith, CIBC – Stephen Forbes,
Manulife – Vipon Ghai, National Bank
of Canada – Mark Mulroney, Royal Bank of Canada – Jamie
Anderson, Toronto-Dominion Bank – Barbara Hooper.
SOURCE CIBC - Corporate