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Streetwise

News and analysis on Bay Street and the world of finance
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Caisse slashes investment in Mick Davis's troubled X2 Resources

RACHELLE YOUNGLAI

The Caisse de dépôt et placement du Québec has slashed its investment in X2 Resources Partners LP Inc., a potentially troubling sign for mining magnate Mick Davis’s fund.

The Caisse reduced its position in X2 to between zero and $5-million at the end of 2015 from as much as $30-million in the previous year, according to the Quebec pension fund’s documents released in April.

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Amid signs of an indie comeback, GMP’s troubles persist

NIALL McGEE

A lot can change in the space of a quarter. Especially for an independent brokerage on Bay Street.

January was pretty much the nightmare scenario for the industry. Crude was trading in the region of $30 (U.S.) a barrel. Underwriting was dead and trading activity was moribund. A number of smaller independents had recently gone out of business, and many observers figured more closings were coming.

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Why CPPIB is banking on hotel bookings

JACQUELINE NELSON

Vacationers and business travellers may soon have Canada Pension Plan Investment Board to thank for their hotel reservations.

The country’s largest pension fund is betting on an often unseen industry that controls overnight accommodation bookings, buying half of Spanish company Hotelbeds Group from Germany’s TUI Group. The €1.2-billion ($1.7-billion) deal is being split with private equity firm Cinven, with the aim to build a larger network of international hotels and booking partners through more deals in the future.

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Lexpert: Key players behind Mitel’s acquisition of Polycom

LEXPERT

Lexpert Roundup on the Business of Law

Lexpert identifies and reports on emerging business issues and practice areas in the business of law. Whether online, in our magazine or in the DealsWire e-newsletter, we chronicle deals and lawsuits of interest, and cover issues of broad concern to the legal profession and those who purchase legal services. We hope you enjoy this sample of our latest content.

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Couche-Tard’s Alain Bouchard could learn from Prem Watsa

NICOLAS VAN PRAET AND JACQUELINE NELSON

Convenience store king Alain Bouchard might still be nursing his wounds – but that shouldn’t stop him from getting back in the ring.

The executive chairman of Alimentation Couche-Tard Inc. never thought his investors would reject a proposal to extend his control of the company past 2021. When they did, it left him stunned and mostly silent. Until this month, when he warned that the company could meet an undesirable fate.

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Lexpert: Dealmakers in Canada adapt to U.S. anti-inversion restrictions

Foreknowledge, it appears, has blunted the M&A impact of anti-inversion regulations released earlier this month by the U.S. Treasury Department.

“The regulations merely implemented rules that everyone has known were coming for at least a year,” says Paul Seraganian in the New York office of Osler Hoskin & Harcourt LLP. “So their effect has been baked into Canadian M&A deal flow for some time now.”

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Scotiabank job cuts spread to wealth management arm

TIM KILADZE

Bank of Nova Scotia’s latest restructuring efforts have spread to its wealth management arm, with major changes to the ScotiaMcLeod retail adviser network announced this week.

In mid-April, the bank announced a review that “advances strategic measures to further position the bank for long-term success,” citing “significant ongoing shifts in consumer behaviours, particularly digital banking adoption.”

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Husky Energy asset sales will be a gauge of sector’s recovery hopes

JEFFREY JONES

Husky Energy’s $1.7-billion sale of interests in its pipes, vessels, nuts and bolts is a hefty deal for a market that’s been creaking under heavy pressure for a year and a half.

Anyone looking for clues into whether it will spur a free-for-all on oil and gas assets could be disappointed, though. The deal is unique in more than a few ways, not least because it’s all being done within the empire of one guy – Hong Kong tycoon Li Ka-shing.

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TSX Venture president to retire

CHRISTINA PELLEGRINI

Since December, the TSX Venture Exchange has been actively looking for ways to jolt its sleepy market back to life. Now, it will have to look for a new president, too.

John McCoach will retire on Dec. 31 after spending six years at the helm of Canada’s largest junior equity market, which caters to small, emerging companies and has become a hotbed for issuers around the world in the resource sector. Mr. McCoach has held executive roles since joining TMX Group Ltd., which owns and operates the Venture, in 2003. He began his career in the securities industry in 1981.

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Dundee hires for Montreal office ahead of privatization

NIALL McGEE

The new hires keep coming at Dundee Capital Markets as the indie dealer prepares a management buyout from parent, Dundee Corp.

Dundee has drafted a number of new faces for its small Montreal office – historically a market in which it has had a strong presence.

Daniel Pearlstein will join Dundee as a specialty pharma and special situations analyst on May 9, according to an e-mail sent to staff on Tuesday. He was previously a life sciences analyst with boutique brokerage M Partners. Mr. Pearlstein will be based in Montreal.

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Dundee Capital bolsters research department ahead of management buyout

NIALL McGEE

Dundee Capital Markets has hired a trio of senior analysts in an attempt to bolster its research department ahead of a planned spinout from parent company Dundee Corp.

Former long-serving Canaccord Genuity energy analyst Phil Skolnick is among those joining the firm. Most recently, Mr. Skolnick has been with Chicago-based hedge fund company Citadel LLC. He parted ways with Citadel in February.

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Dynamic Funds hires OMERS investment manager

JACQUELINE NELSON

Dynamic Funds is bringing on a portfolio manager with a background in pensions to bolster its global investing expertise.

Eric Benner has been hired as vice-president and portfolio manager at the fund company, which is owned by Bank of Nova Scotia.

Mr. Benner was most recently a managing director and co-head of equities in the capital markets business of the Ontario Municipal Employees Retirement System. In that role he led a team of 13 that managed several global equity portfolios and helped oversee $3-billion.

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Be wary of Bay Street cheerleaders

BRIAN LEE CROWLEY and SEAN SPEER

Brian Lee Crowley is managing director of the Macdonald-Laurier Institute; Sean Speer is a senior fellow at the institute.

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Conflicts of interest are everywhere these days. Whether it’s ministers raising money for their party by selling access or real estate agents in British Columbia exploiting vulnerable homeowners, the criticism is always the same. When someone’s private and public interests conflict how can we be confident it’s the public interest that will prevail?

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Freeport mulls selling minority stake in copper mine portfolio

RACHELLE YOUNGLAI

Freeport McMoRan Inc. is considering selling a minority stake in its portfolio of copper mines, one of the options on the table as the company scrambles to slash its $20-billion (U.S.) debt load, sources familiar with the matter said.

Freeport had initially planned to take part of its energy business public to raise cash. But with oil prices in the dumps and scant investor interest, the company put those plans on the back burner, the sources said.

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Head of retail brokerage CIBC Wood Gundy to retire

TIM KILADZE

Canadian Imperial Bank of Commerce is losing one of the investment industry’s best-known faces as the head of its retail brokerage arm retires.

Monique Gravel, who has been with the bank since 1978, is stepping away at the end of June, the bank recently announced internally.

Ms. Gravel started with Wood Gundy as an investment adviser after graduating from McGill in 1978 and grew to become one of the top producers in Montreal. She joined CIBC when the bank bought Wood Gundy and has been there since.

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Buyout talk takes spotlight off Concordia’s compensation

Niall McGee

A potential buyout of Concordia Healthcare Corp. may help take the spotlight off criticism that executive compensation at the company is excessive.

On Thursday, the Canadian serial pharmaceutical asset acquirer, said it had established an independent committee to consider strategic alternatives and that it held discussions over a potential transaction.

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Major U.S. ETF provider WisdomTree launching in Canada

CLARE O’HARA AND TIM KILADZE

One of the top American companies for exchange traded funds is coming to Canada, hiring a familiar face in retail distribution to help make a splash.

Wisdom Tree Investments is a leading ETF provider south of the border, ranking as a top-five player when judging by assets under management. The company is now looking to launch here and offer a suite of funds tailored to Canadians.

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Public saga erupts around concern for future Couche-Tard ownership

NICOLAS VAN PRAET, TIM KILADZE and BERTRAND MAROTTE

Concerns about family succession and the abilities of the children of Alimentation Couche-Tard Inc.’s founders to steer the convenience store chain into the future has erupted into a public saga, putting the Quebec company at odds with some of its biggest institutional investors.

Mutual fund giant Fidelity Investments is among investors opposed to a proposal by the four founders of Couche-Tard to extend their control of the convenience store chain, sources said. Couche-Tard’s largest shareholder with an estimated 11 per cent of the subordinate-voting shares, Fidelity voiced its disapproval of the founders’ proposal, according to someone familiar with the talks – which was pulled by the retailer before it was scheduled to go to a shareholder vote in September, 2015. Fidelity hasn’t wavered since.

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Paralyzed by tumult: Volatility slams U.S. banks, but what about Canada?

TIM KILADZE

Before the big American banks reported quarterly earnings, energy loans were on everyone’s minds. How horrible would the writeoffs be? Would we figure out when the pain will end?

How quickly we forget. Since the results came out, capital markets have dominated the conversation – with extra emphasis on collapsing trading revenues.

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Fiera digs into P3, mid-market infrastructure deals

JACQUELINE NELSON

Fiera Capital Corp. is getting back in the infrastructure game with an eye on government building projects.

The asset manager said Wednesday that it would buy a portfolio of five assets using the Fiera Infrastructure Inc. group it recently created in a partnership with Canadian investment firm Aquila Infrastructure Management.

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Meridian targets small-business growth in deal with Scotiabank

JACQUELINE NELSON

Meridian Credit Union Ltd. is betting on equipment lease financing with a deal that puts small businesses front and centre.

The largest credit union in Ontario struck a deal with Bank of Nova Scotia to acquire part of its Roynat Inc. subsidiary that works with equipment manufacturers and their customers who want to lease rather than buy. It’s the first time Meridian has done a deal outside of the credit union universe, where deals largely just involve merging balance sheets. Roynat Lease Finance will add more than 100 full-time employees to Meridian’s operation with offices from B.C. to Quebec.

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REIT and real estate financings show signs of comeback

TIM KILADZE

It’s been one of the strangest dichotomies of these difficult markets. Despite persistently low interest rates and demand for securities with big yields, Canadian real estate investment trusts have been stuck in the dumps.

Until now. For the first time in a year, REITS and real estate corporations are showing signs of a comeback. Many of their unit prices have popped, leading to new financings and raising the prospect of more acquisitions.

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Trudeau can play hardball with Bombardier: Bay Street has his back

TIM KILADZE

What a pickle our Prime Minister is in. Bombardier Inc., one of Canada’s best-known companies, is begging for a billion bucks.

His predicament: The same executives who put the company in this precarious position, by blowing the C Series budget and mismanaging the entire project, leading to a nasty $3.2-billion (U.S.) writedown, are still calling the shots. Sure, they brought in a new chief executive officer and, yes, he’s made some serious strategic changes. But the board is still run by executive chairman Pierre Beaudoin, who was booted as CEO 14 months ago.

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Brookfield amasses $9-billion for new real estate fund

JACQUELINE NELSON

More land, buildings and assets you can see and touch – that’s what institutional investors want from Brookfield Asset Management Inc.

Brookfield said Monday that it had amassed $9-billion (U.S.) in commitments for a private real estate fund in the latest signal that large investors are hungry for more “real” assets. The fund is a whopping $2-billion larger than its initial target – and more than double the size of the fund’s predecessor in 2013.

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UBS closes Calgary office as energy slump drags on

JEFFREY JONES

UBS AG is closing up shop in Calgary, following several years of contraction in Canada’s energy hub.

The Swiss-based bank has decided to handle equity research, investment banking and wealth management in the city from its other locations in Canada, including Vancouver, Toronto and Montreal, a bank source said.

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Caisse shakes up investment oversight, spins off infrastructure group

JACQUELINE NELSON

Caisse de dépôt et placement du Québec is revamping its investment approach in an environment chief executive officer Michael Sabia calls “increasingly complex.”

Canada’s second-largest pension fund is merging its public market and private market investment management under the oversight of its chief investment officer and creating a separate subsidiary for its prized infrastructure group.

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Fairfax seeks to boost business through venture capital

JACQUELINE NELSON

Fairfax Financial Holdings Ltd. plans to invest in startups to boost its businesses as more corporations wade into the venture capital scene.

The Toronto-based insurance and investment company formed FairVentures as an answer to the two big tech challenges many financial firms are grappling with: how to better serve and reach customers using technology, and how to avoid being knocked off course by emerging “disruptive” businesses.

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Canaccord Genuity parts ways with two senior investment bankers

NIALL McGEE

Canaccord Genuity Group Inc. is parting ways with two senior investment bankers.

Ali Pejman, a mining banker and part of Canaccord’s executive team, has tendered his resignation. Friday will be his last day at the independent brokerage.

“Ali played a significant role in the growth of our [public venture capital] business and made many contributions to our investment banking business,” Pat Burke, president, capital markets Canada, at Canaccord, wrote in a memo that was sent to staff on Thursday.

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Scotiabank launches new round of jobs cuts as consumers move online

DAVID BERMAN AND NIALL MCGEE

Bank of Nova Scotia has embarked on a new wave of job cuts as it confronts slowing growth and shifting consumer demands.

A spokesperson said the cuts were related to a goal of simplifying the bank and moving resources away from traditional branch banking and investing in technology and innovation as consumers increasingly conduct transactions on computers and smartphones.

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Scotia Capital shuffles trading desk after sudden departure of senior traders

NIALL McGEE

Scotia Capital Inc. has shuffled its trading desk in the wake of the sudden departure of a number of senior traders.

Craig Gilchrist has been promoted to head of Canadian equity sales and trading. He was previously co-head.

The changes at Scotia will also see Paul O’Hea, who previously shared the role of co-head of liability trading with Scott Wigle, take on new responsibilities. A Scotia spokesperson said that Mr. O’Hea will continue to manage liability trading but will also assume responsibility for Canadian equity sales trading.

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