Canadian Markus Frind, founder of Plenty of Fish, the No.1 busiest dating site in North America.Laura Leyshon/The Globe and Mail
DEAL OF THE WEEK:
Borealis buys second-largest stake in Spanish oil transport giant CLH
Another Canadian pension fund is buying a slice of a Spanish oil transport giant, spotlighting the impact that some of the country's largest investors could have in energy infrastructure deals at home and abroad.
Borealis Infrastructure, a division of the Ontario Municipal Employees Retirement System, will be the second-largest investor in Spain's largest oil transport and storage company. The pension fund gathered up a 24.15-per-cent stake in Companía Logística de Hidrocarburos (CLH) through two recent deals, building out its investment footprint in Europe.
The deal came in two parts. However, Borealis didn't disclose what it paid to acquire a 9.15-per-cent stake from Spanish oil and gas company Companía Espanola de Petroleos SAU in January or for the 15-per-cent stake it bought from Global Infrastructure Partners, which is expected to close during the first quarter of 2016. Story
MERGERS AND ACQUISITIONS
Anglo American mulls sale of Brazilian nickel assets
Anglo American PLC is considering selling its Brazilian nickel operations as the company races to overhaul its business amid the prolonged slump in commodity prices, according to people familiar with the matter.
The London-based miner is under immense pressure to strengthen its balance sheet with metal and mineral prices in the dumps. Anglo has already suspended its dividend, announced 85,000 job cuts, as well as plans to divest underperforming assets.
The company aims to raise $4-billion (U.S.) from asset sales and has so far targeted its South African coal, some copper, Australian thermal coal, phosphate and niobium. Story
INVESTMENT BANKING
Turmoil marred Jacob Securities' final months
The final months of life for Jacob Securities Inc. were marred by capital deficiencies, compliance violations, a senior executive's abrupt exit and employees being locked out of the office, according to documents released Tuesday.
Amid the pandemonium, the Toronto-based broker dealer was still trying to raise money for a new fund, say documents from the Investment Industry Regulatory Organization of Canada. On Dec. 18, IIROC announced it had suspended Jacob Securities' membership, which effectively put the dealer out of business.
"We disagree with both the characterizations and the outcome of the report, and we are weighing our options," Sasha Jacob, founder and chief executive officer of Jacob Securities, said in an interview.
According to the report from the IIROC hearing panel, Jacob Securities had been on the regulator's radar as far back as May, 2013, when it was flagged for "low risk-adjusted capital." IIROC-registered dealers must maintain a minimum amount of capital. If levels drop below minimum values, the regulator has the right to suspend the firm's membership. Red flags also went up in 2013 about the firm's liquidity and lack of profitability. Over time, IIROC also cited the firm for compliance violations including insufficient supervision of trading. Story
Dundee Capital Markets plans management takeover
Employees of Dundee Corp.'s capital markets division are quietly planning to take the dealer private, as its parent company grapples with a commodity rout that continues to erode profit.
The proposed management buyout of Dundee Capital Markets Inc. – using a partnership model that has largely fallen out of vogue – has been in the works for a while and may not be completed for months. The ultimate goal is to give top partners stakes in the investment bank, with Dundee Corp. retaining some ownership.
The spinoff comes at a rough time for the industry, with numerous boutique dealers shutting down and bigger independents slashing staff and costs.
Earlier this month, GMP Capital Inc., one of the largest independents, cut nearly a quarter of its work force.
Any spinoff will also dovetail with the continuing shakeup of Dundee Corp.'s business. David Goodman took over as the parent company's chief executive officer from his father, Ned, in July, 2014, and he immediately started reworking its investments. Dundee sold stakes in its real estate investment trusts early in his tenure, and the sales continued from there. This January, the company unloaded its retail brokerage business to Euro Pacific Canada for an undisclosed price. Story
CHARTERED BANKING
Laurentian Bank CEO has a message: Big changes are coming
Laurentian Bank of Canada has ambitious targets: Double its size, in terms of assets, and get its return-on-equity in line with the big banks by 2022.
The two goals were delivered during the bank's investor day on Tuesday, when chief executive officer François Desjardins reviewed some of the bank's recent achievements but also pointed out that big changes are coming.
Canadians are doing more of their banking on their computers and smartphones and they are carrying less cash, pushing the Big Six toward making huge investments in technology to keep up with shifting consumer preferences.
The problem for Laurentian? It is not a big bank. Its assets are just $38-billion – compared with, say, $1.1-trillion for Toronto-Dominion Bank – which suggests that expensive investments could be out of reach.
Adding to the problem is the fact that Laurentian does not have profit-gushing retail banking operations. Retail services generated 43 per cent of the bank's revenue in fiscal 2015, yet accounted for just 14 per cent of its adjusted profit (compared with 50 per cent or more for the big banks). Story
PRIVATE EQUITY
Betting on a recovery: Banker brothers target energy with new PE firm
A pair of banker brothers has started a private equity firm that aims to track an eventual recovery in energy markets.
Paul Colucci, who headed Dundee Securities' London office until last year, and Matt Colucci, previously at AltaCorp Capital Inc., are in the process of identifying investments and amassing capital for the firm, PillarFour Capital, as oil and gas markets sputter.
The focus is on the small- and mid-capitalization Canadian and international energy category, where a growing number of senior executives are looking to start new energy ventures after downsizings that have spread throughout the sector.
"That's kind of where our relationships and expertise lie," Paul Colucci said by phone from London, where he runs one of two PillarFour offices. The other is in Calgary. Story
VENTURE CAPITAL
Frind's venture investment problem: Not enough fish
Markus Frind can't find anything to buy.
The Vancouver tech entrepreneur, who sold his online dating site Plentyoffish.com last year to Match Group for $575-million (U.S.), has set aside about $100-million (Canadian) of his net worth to invest in startups (he was Plentyoffish.com's sole owner).
Last year, he plowed more than $20-million into online Vancouver furniture retailer Cymax Stores Inc. and led a $9-million financing of another hometown firm, financial technology firm Grow (formerly Grouplend).
After that roaring start, however, Mr. Frind is finding it hard to hook the next big catch in venture investing. Mr. Frind is looking specifically for firms with more than $5-million in annual revenue – a startup that has had initial success and is starting to build its team – where he can sit on the board "and where I can make a measurable impact on the day-to-day" aspects of the company's development, he said at this week's Cantech Investment conference in Toronto. Story
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