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Felix Chee, China Investment Corp.'s chief representative in Canada. (Anthony Jenkins)
Felix Chee, China Investment Corp.'s chief representative in Canada. (Anthony Jenkins)

The Lunch

Felix Chee: Building an economic bridge to China Add to ...

His upbringing gave him the advantage of seeing China through an international lens. And his successful career in Canada has earned him credibility with local bankers and directors who have little experience with Chinese investors.

This unique background was instrumental in "bridging the gap" between Teck's board of directors and CIC when the mining company was scrambling to raise cash to pay huge debts that were coming due. Though Teck was in need, people familiar with the talks said some of its directors were concerned that CIC had a secret agenda to help one of China's mining giants seize control of the Vancouver company.

"The takeover negotiations were 20 per cent [about]price and 80 per cent how to deal with China Inc."

That Teck was hesitating at such a time of need frustrated some of CIC's senior officials, sources say. They credit Mr. Chee for keeping talks open and eventually convincing both sides that the investment was in everyone's interest.

That deal opened doors, too, to other resource companies that are willing to tap CIC's huge pool of cash in exchange for selling a minority interest. Last year, CIC agreed to spend $1.2-billion to acquire a small stake in Penn West Energy Trust and help finance an oil sands venture. The deal is largely seen as a template for other foreign companies that are eager to invest in the Canadian oil sector without triggering nationalistic concerns.

Mr. Chee's early experience as an project analyst at a Singapore bank taught him lessons that served him well in Canada. His job was to assess the viability of machinery purchased by business clients with banks loans. His insights earned him respect - and a seat on a number of company boards. Their struggles gave him a life-long appreciation of the importance of capital and the need to invest it efficiently.

When his new wife Margaret pushed to broaden their horizons, they chose to stake their future in North America's booming economy. Canada became their home because of its more relaxed immigration policies.

He landed a job in research at Ontario Hydro by answering a want ad. At the sprawling provincial power utility, he found a bureaucratic organization that raised hundreds of millions of dollars to expand operations with little attention to modern financial disciplines, such as measuring returns on invested capital.

Early efforts to analyze Ontario Hydro's capital programs met with resistance. A request to purchase a $180 Hewlett-Packard calculator was rejected as too costly (he bought it with his own money). He was forced to share a computer when writing software code to build programs that could assess liabilities and returns in the utility's capital program.

"When my time was up, the computer would go 'ding' and my manager would yell my time was up," he said.

When interest rates soared in the early 1980s, Mr. Chee's skills became increasingly in demand. He introduced basic policies to stagger bond maturities to control the flow of cash. And he imported new financial tools such as swaps and options to shield against volatile interest and currency rates. Ontario Hydro was one of the first Canadian companies to employ the derivatives that are now standard in most corporations.

His success earned him senior posts at Manulife Financial and then the University of Toronto, where, starting in 2000, he was placed in charge of operations ("everything from campus police to finance and parking"). He also took the reins in the mid-2000s of the university's endowment fund, leaving him with the task of overseeing a fund just as the bull market was running out of steam.

He decided to retire in early 2008 as the global meltdown was beginning. Although he is disappointed that the endowment fund took a heavy hit during the crisis, he says the charged political environment at the university "was good training for China."

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