Canadian banks and insurance companies announced their intent to create a fund dedicated to investing up to $1 billion in Canadian businesses over the next decade.
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.
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 the future 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.
The Fund will operate as an independently managed entity, supported by its investors with its own independent board of directors and management team, with plans to open offices and personnel across Canada.
The Fund will begin a search for an independent chair and a CEO, and plans to have an executive team ready to deploy capital within the next year.
The fund will also facilitate mentorship and access to talent pools to assist businesses with scaling, and the executive team will be responsible for building this advisory network. By providing access to senior talent to fill in the knowledge gap for entrepreneurs growing mid-sized companies, the fund’s ultimate goal to help business founders maintain effective control of their companies to execute on their vision as they grow.