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Streetwise

News and analysis on Bay Street and the world of finance
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Entry archive:

CIBC’s Belsher to retire in executive shakeup

DAVID BERMAN

Canadian Imperial Bank of Commerce’s co-head of wholesale banking, Geoff Belsher, is retiring from the bank at the end of September as part of a broad executive reorganization at the lender under new chief executive officer Victor Dodig.

Harry Culham, who shared the wholesale banking role with Mr. Belsher, was named group head of the division.

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McRock Capital adds another major global investor to first fund

SEAN SILCOFF

Toronto-based venture capital fund McRock Capital has added a third big global investor to its first fund, which has closed after raising $65-million, the top end of its target.

McRock, which seeks to back early-stage companies focused on the “industrial internet of things” sector, closed out the McRock iNFund LP with a $10-million commitment from the HarbourVest Canada Growth Fund, managed by global private markets giant HarbourVest Partners LLC. The HarbourVest fund joins McRock backers Électricité de France and Cisco Investments as well as Canadian backers Alberta Enterprise Corp., BDC Capital, Export Development Canada, Kensington Venture Fund LP, and Teralys Capital Innovation LP.

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RBC loses fixed-income ground as BMO drives hard

NIALL McGEE

RBC Dominion Securities Inc.’s long-term lock on underwriting and trading fixed income in Canada is under siege.

“There is only one story in Canadian fixed income this year, and that story is BMO,” according to a Greenwich Associates report released Wednesday. BMO Nesbitt Burns Inc. has “closed the previously precipitous gap.”

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OSC investment funds head departs for an asset manager

CLARE O’HARA

Long-time regulatory executive Rhonda Goldberg has joined the asset management industry she has spent the past 16 years overseeing.

Ms. Goldberg, a former director with the Ontario Securities Commission, will assume the role of vice-president of regulatory affairs for investment powerhouse IGM Financial Inc., parent company of Mackenzie Financial Corp. and Investors Group Inc., on Sept. 15.

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The inside story of the mess at AGF

Tim Kiladze

In early December of last year, as the investment community was starting to gear down for the holidays, Blake Goldring quietly prepared to drop a bomb. As a dim morning light spread over Bay Street, the CEO of AGF Management Ltd. got ready to announce the most contentious move of his 15-year reign.

A fierce debate among investors and analysts had presaged the decision. Simple math suggested there was no other option but to cut AGF’s dividend: By December, quarterly payments to shareholders ate up virtually all of AGF’s free cash flow, leaving nothing to invest back in the business. Still, there was a major unknown: Would Goldring have the nerve to chop the payout? Few things irk investors more than dividend cuts, and the CEO was already under siege for AGF’s ugly investment performance.

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Daily Deal Roundup: Tricon Investment Partners files IPO

AHMAD HATHOUT

DEAL OF THE DAY: Schlumberger to buy Cameron International

Schlumberger Ltd, the world’s top oil field services company, is set to acquire oil field equipment maker Cameron International Corp in a deal valued at $14.8-billion (U.S.). Cameron’s shares shot up to $61.94 in premarket trading on Wednesday, while Schlumberger’s shares rose 1.4 per cent to $73.57. Full story

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The Man Who Shorted Canada on why his view hasn’t changed

SEAN SILCOFF

The Man Who Shorted Canada is as pessimistic as ever about the country’s prospects.

In fact, Vijai Mohan foresees a downturn for this country that could rival the early 1990s recession in its severity.

In April, 2013, his San Francisco-based hedge fund, Hyphen Partners LP, had made a big bet against the Canadian economy, amassing short positions against bank shares and the loonie, betting their value would fall sharply. At the time, he was an outlier, although others joined the “Sell Canada” bandwagon.

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Lexpert: Legal job market looking up for students, junior associates

Anyone with their finger on the pulse of the legal job market will be used to hearing words such as “cutting back” and “slimming down.” But some legal recruiters say the news is not nearly as grim as you might assume at the articling student and junior associate end of things.

“What I am seeing over the next 12 to 14 months is rapid growth in terms of the number of jobs,” says Gene Roberts, director of Robert Half’s legal recruitment division in Toronto. “I think we are going to see job growth of between 3 per cent and 5 per cent, largely driven by litigation and corporate-law practice areas – mergers and acquisitions, corporate securities and areas like that.”

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Montreal’s Real Ventures closes $89-milion fund

SEAN SILCOFF

One of Canada’s most successful early-stage venture capital firms, Montreal’s Real Ventures, has closed its third fund, an $89-million pool co-managed by Janet Bannister, who created and built the online classifieds business Kijiji for eBay.

The fund is noteworthy for several reasons aside from the leadership of Toronto-born Ms. Bannister, an all-too-rare female general partner in the male-dominated VC scene. Its backers include the Government of Canada, which has invested $10-million through its Venture Capital Action Plan program, as well as one of Canada’s largest and oldest private foundations, the $635-million McConnell Foundation of Montreal.

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Daily Deal Roundup: WSP Global buys MMM Group for $425-million

SERES LU

DEAL OF THE DAY: Encana to sell Louisiana natural gas assets for $850-million

Canadian oil and gas producer Encana Corp. said it will sell its Haynesville natural gas assets in northern Louisiana for $850-million (U.S.) to GEP Haynesville LLC. The company has been concentrating spending on regions rich in high-value gas liquids and oil and selling off natural gas assets. It plans to reduce its gathering and midstream investments by about $480-million on an undiscounted basis by 2020. Full story

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Top executive Ross McCredie parts ways with Dundee Corp.

NIALL McGEE AND GARY MASON

One of the most high-profile figures in the Canadian luxury real estate industry has departed Dundee Corp.

Ross McCredie, who was CEO of Sotheby’s International Realty Canada, which specializes in selling high-end homes and McMansions to affluent Canadians, parted ways with Dundee last month.

On July 15, in an internal statement sent out to Sotheby’s International Realty Canada and Quebec real estate agents, the firm announced that Mr. McCredie was leaving the firm. No reason was given for his departure. Robin Conners assumed the CEO role on an interim basis, according to the statement.

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Vanedge looks to raise Vancouver’s biggest VC fund

SEAN SILCOFF

Vancouver’s venture capital community has taken a lot of knocks in recent years: The number of VC firms investing in tech startups has shrunk to 9 from 43 in 2002, and some entrepreneurs around town mutter that many of those still in business are small, lacklustre and not as supportive of local companies as they should be.

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Daily Deal Roundup: Sun Life in talks for possible $900-million acquisition

DUNCAN HOOD

DEAL OF THE DAY: Sun Life in talks to buy Assurant’s employee benefits unit

Sun Life Financial Inc. is in talks to buy Assurant Inc.’s employee benefits unit, people with knowledge of the matter said. A deal valuing the unit at as much as $900-million (U.S.) could be announced within two weeks, said the people, who asked not to be identified because the matter is private. A sale hasn’t been finalized and the talks could still fall apart, they said. Full story

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Watsa wisdom: Fairfax’s (latest) bet on a market correction

JACQUELINE NELSON

Monday’s widespread market tumult prompted calls that lofty stocks were overdue for a correction in many parts of the world.

But few have been foretelling a downturn for as long as Prem Watsa, chief executive officer and founder of investment and insurance company Fairfax Financial Holdings Ltd.

A long-time value investor, Mr. Watsa has warned about risks in the global markets in recent years, as his company fully hedges its equity portfolio to protect against “permanent capital loss from the many potential unintended consequences that abound in the world economy.”

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Fairfax shareholders approve new voting powers for Watsa

JACQUELINE NELSON

Shareholders of Fairfax Financial Holdings Ltd. have approved a proposal to lock in the voting control of founder Prem Watsa’s shares.

The insurance and investment company said Monday that its move to modify the terms of the company’s dual-class share structure passed its shareholder vote by a narrow margin after twice being delayed to rally more support. The company needed two-thirds of subordinate shareholders to consent to the changes and received support of 69.7 per cent.

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Daily Deal Roundup: Windstream hires RBC for $500-million unit sale

Duncan Hood

DEAL OF THE DAY: Windstream Said to Hire RBC for Data Storage Unit Sale

Windstream Holdings Inc. has hired Royal Bank of Canada to advise on the sale of its data storage business and is aiming to raise $500-million (U.S.) to $750-million, according to people familiar with the matter. Potential bidders for the unit of the Little Rock, Arkansas-based telecommunications firm include private equity players ABRY Partners and GI Partners, said one of the people, who asked not to be identified. Windstream purchased the hosted-solutions business from ABRY in 2010 for $310-million. Full story

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Heated exchange: The mini-feud between TMX and Aequitas

NIALL McGEE

A mini-feud has broken out between the chief executives of two of Canada’s stock exchanges. One runs the incumbent market leader that’s been around forever. The other heads an upstart that’s only been on the scene for a few months.

On Aug. 14, Jos Schmitt, CEO of Aequitas Innovations Inc. (the upstart), appeared on Business News Network (BNN) and blamed TMX Group Ltd. (the incumbent) for a “liquidity crunch” in Canada, claiming that there are thousands of securities on TMX’s exchanges “that are barely experiencing any liquidity,” with volume concentrated in only about 250 securities.

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Daily Deal Roundup: Valeant buys Sprout and Carbon3D gets a $100-million boost

SERES LU

DEAL OF THE DAY: Valeant Pharmaceuticals International Inc. has announced it will buy Sprout Pharmaceuticals, which makes a controversial new female libido drug, for $1-billion (U.S.). The drug, called flibanserin but marketed under the brand name Addyi, is set to be available in the U.S. later this year. A Canadian launch is also planned. Laval, Quebec-based Valeant’s shares fell about 5 per cent as Wall Street questioned whether the acquisition would be too risky for the company, which has done six other deals this year. Full story

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Daily Deal Roundup: Startup Grouplend gets $10-million cash infusion

SERES LU

DEAL OF THE DAY

Grouplend, a Canadian online lending platform, announced that is has secured $10.2-million in new funding after launching only 10 months ago. The round is being led by Markus Frind, CEO of PlentyofFish, which recently sold for $575-million (U.S.), and Lance Tracey, founder of Peer 1 Hosting, and Sutton Real Estate Group. Full story

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Fact-checking tedium helps avert major legal issues

ADRIAN MYERS

Law is the art of turning the metaphysical into the mundane. Aspiring lawyers around the country are discovering this right now as the articling term starts. The high-level analysis that took place in law school has been exchanged for the in-the-weeds labour of reviewing mountains of contracts for due diligence, or combing through pages of dispositions. Sometimes, the connection between legal concepts and the meticulous work involved in applying them can seem tenuous at best.

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TMX chief executive Lou Eccleston looks to build Bay Street bridges

TIM KILADZE AND NIALL MCGEE

After nine months at the top of TMX Group Ltd., Lou Eccleston is making it clear he wants to end the current cold war with Bay Street.

Before the new chief executive set foot in Canada last November, many of TMX’s top clients had grown frustrated with the company’s dominant position. Controlling more than 70 per cent of Canadian trading volumes, TMX, which operates the S&P/TSX Composite Index, has a virtual monopoly on market data and has long dictated market dynamics, such as fostering an environment where high-frequency trading flourished.

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Lexpert: Growth in trade law reflects global business practices

Some lawyers are calling this the “golden age of international trade law.” Both public and private-sector lawyers are comparing trade law’s growth to burgeoning practice areas such as aboriginal and constitutional law, which are admittedly somewhat further along the curve.

The spread of globalization means increased engagement with other countries’ laws, including trade laws. As other countries’ laws become more important to business, they become more important to law firms. “Trade laws are sliding their way up the ladder when conglomerates try to figure out what’s best for the whole entity,” says Darrel Pearson of Bennett Jones LLP in Toronto. “They’re right up there with other important issues like the environment, government intervention and the cost of transportation.”

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After Plentyoffish.com sale, Frind casts net in local startup scene

Sean Silcoff

Vancouver tech entrepreneur Markus Frind has wasted little time pouring some of his recent windfall back into the local startup scene.

Mr. Frind, who sold his online dating site Plentyoffish.com last month to Match Group, part of Barry Diller’s IAC/InterActiveCorp., for $575-million (U.S.), is the lead investor in a $9-million (Canadian) financing for Vancouver online lending business Grouplend that closed this past week. The firm, which launched its platform in October, has raised $10.2-million in total. Mr. Frind, who was the sole owner of Plentyoffish.com, has also recently invested $18-million in another early-stage Vancouver e-commerce company, online furniture retailer Cymax Stores Inc.

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Daily Deal Roundup: CGI buys B.C.-based tech company

AHMAD HATHOUT

Deal of the Day: CPPIB takes first step into Malaysian real estate market

The Canada Pension Plan Investment Board is making its first splash into real estate in Malaysia. The CPPIB has purchased a 49-per-cent stake worth about $170-million in a joint venture to invest in a mixed-use development in the capital city of Kuala Lumpur with Malaysia’s Pavilion Group. Full story

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Why Dundee Corp.’s new writedown is so large

TIM KILADZE

There’s no way to sugar coat it: Dundee Corp.’s latest earnings are tough to swallow, with the holding company losing $149.9-million last quarter.

Dig through the financials and it’s clear the current trouble stems from a single writedown: Dundee Corp. owns 25 per cent of Dundee Precious Metals, and the holding company incurred a $121.4-million loss on this investment.

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Manulife Asset Management builds institutional sales with new hire

JACQUELINE NELSON

It’s been a busy summer for Manulife Financial Corp.’s asset management business, which has brought on several new business leaders over the past few weeks.

The latest recruit is Dario Di Napoli, who has been hired as a managing director in institutional sales. He will be based in the Toronto office.

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A bold idea for Bay Street: scrap quarterly earnings reports

TIM KILADZE

Rome wasn’t built in a day, and the futures of big Canadian companies can’t be irreversibly altered in one or two quarters.

But for some reason, we still put unbelievable stock in short-term profits.

Come August each and every year, corporate earnings dominate headlines as the toxic combination of subdued deal flow on Bay Street and summer news blues in political capitals creates a vacuum of stories. Starved of other stimuli, investors, analysts and the media latch on to interim corporate updates.

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Daily Deal Roundup: Brookfield creates international transport heavyweight

DUNCAN HOOD

DEAL OF THE DAY: Brookfield in $8.6-billion deal for Australian freight firm Asciano

Brookfield Infrastructure Partners LP is acquiring Australian port and rail systems in one of the largest infrastructure deals this year, aiming to create a competitive international transport heavyweight. The Hamilton, Bermuda-headquartered global infrastructure investor said Monday that it would take a majority stake in Melbourne-based Asciano Ltd. in a deal worth $8.6-billion, plus debt. Full story

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Contagious Gaming aims high with bid for U.K. competitor

NIALL McGEE

Junior Canadian gambling software company Contagious Gaming Inc. acknowledged it is in discussions to buy its much larger United Kingdom-based competitor Sportech PLC., but says any transaction would be subject to a number of conditions, including securing financing.

On Friday, Sportech said it had received a takeover proposal from the Vancouver-based firm. With a market capitalization of just under $300-million, Sportech is 16 times bigger than Contagious, which is worth only around $18.5-million.

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OMERS VC firm taps Cisco and BMO for new fund – and not the taxpayer

SEAN SILCOFF

For years, Canadian politicians, entrepreneurs and investment professionals have lamented the lack of private capital available to fund early stage tech companies domestically. The late Jim Flaherty even compelled the federal government in 2013 to pour $400-million into Canadian venture capital when he was finance minister to spur on investment in startups.

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