Hundreds of Canadian investors lured their global peers to Toronto’s eastern waterfront on Monday to make the case for investing in Canadian technology.
Attendees whom BetaKit spoke with felt the industry put its best foot forward at the Canadian Global Growth Forum. Many said they connected with more new international investors than they have at previous events on Canadian soil.
“By five o’clock, you should be able to decide whether Canada belongs in your portfolio, and you should know exactly who to call when that opportunity arrives.”
The Sept. 13 gathering was one of the highest-profile side events that took place this week ahead of Prime Minister Mark Carney’s Canada Investment Summit. Its organizer, the Canadian Venture Capital & Private Equity Association (CVCA), pulled the event together to sell foreign investors on the benefits of deploying their capital in Canada. It featured a private limited partner (LP) breakfast and a series of short presentations, networking sessions, and curated meetings.
The CVCA and general partners (GPs) at its member venture capital (VC) and private equity (PE) firms sought to convince leaders from the major global asset managers that had descended upon the city for Carney’s summit to invest in their funds, portfolio companies, and projects.
GPs and LPs described the event to BetaKit as a good start towards building deeper international investment ties, and expressed hope that some of the relationships they established would lead to more LP commitments and co-investments down the road.
Emerging from “10 years of hibernation”
The Canada Investment Summit aims to attract new foreign investment to advance Canadian nation-building projects—including in tech—and grow the country’s economy as Canada looks to bolster its independence and deepen its international relationships amid an ongoing trade war with the United States. In the lead-up, major Canadian banks and pension funds have begun putting their money where their mouth is by committing more than $400 billion towards investing in Canada over the coming years.
CVCA CEO Benjamin Bergen kicked off his pitch for international institutions to follow suit by highlighting Canada’s relative stability, strong credit rating, low debt burden compared to G7 peers, increasingly diverse international trade relationships, and the federal government’s commitment to explore a capital gains reinvestment mechanism as selling points.
“By five o’clock, you should be able to decide whether Canada belongs in your portfolio, and you should know exactly who to call when that opportunity arrives,” Bergen said.
Sectors highlighted included AI, space, and quantum computing, as executives from leading tech firms like Cohere, Kepler Communications, Nord Quantique, Photonic, Promise Robotics, Xanadu, Waabi, and Wealthsimple took the stage, alongside leaders from Brookfield Asset Management, Mubadala, HarbourVest Partners, and Sagard.
Council of Canadian Innovators CEO Patrick Searle told BetaKit Monday’s gathering featured “a full-circle conversation about access to capital, capital formation, and helping companies scale.”
“I haven’t seen an event like this before, where you have industry, investors, government, premiers, [and] sovereign wealth funds all in the room at the same time,” he said.
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Domestic GPs and LPs whom BetaKit spoke with from across stages and asset types were predominantly happy with the quality of the content and the calibre of tech being showcased.
Sagard chair and CEO Paul Desmarais III was perhaps the most bullish speaker of the day. He proclaimed that these events demonstrate that “Canada is back.” Desmarais III credited the federal government for arranging the Canada Investment Summit, speaking directly to the business community, and being “responsibly realistic,” adding that, “I feel like we’ve come out of 10 years of hibernation.”
“The clear message that was delivered is that Canada is open for bigger assets,” Maverix Private Equity founder and managing partner John Ruffolo told BetaKit. He added that, while resulting investments will take time, “conversations are starting, and relationships are starting to build, and it’s creating the foundation for future opportunities.”
“Never waste a good crisis”
Responses to the level of international LP attendance, which might have been hampered by competing events like the Milken Institute’s gathering, were a bit more mixed. For most of the investors in attendance, who were too small to garner invites to the Canada Investment Summit, the event offered a unique chance to network with possible foreign partners. Some expressed disappointment that they didn’t encounter more such LPs, while others were heartened by the amount of fresh faces they met.
For his part, Bergen said he was pleased by the turnout for the event, which CVCA raced to organize in nine weeks, and was an “exercise in speed.” He noted 40 international LPs RSVP’d to the event from across Europe, the Middle East—including a sizeable delegation from the United Arab Emirates—and the United States, and expressed belief that the CVCA could draw even greater attendance with additional planning time.
Another Canadian investor, whom BetaKit spoke with on background, said they met lots of previously unfamiliar LPs and felt a “genuine excitement” in the room. “One of the quotes I heard was ‘never waste a good crisis,’” the investor said. “I think it’s so true. Canada is in a great position to use the resources, the talent, and capital base that we have to our advantage.”
Brookfield PE group chair Cyrus Madon argued on stage that the US trade war was “the greatest gift” Canada could have possibly received because it has forced the country “to focus on what really matters.”
“All the noise and all the other piffery that we used to talk about is all gone,” Madon added. He said that “every level of government now is talking about, ‘how do we create jobs, how do we track capital, how do we create certainty for investors?’” The group chair predicted that Canada’s “bump in the road” will have “huge” long-term benefits for the country.
As to what Canada has been doing right when it comes to encouraging private tech investment, HarbourVest Partners managing partner John Toomey argued that the feds’ Venture Capital Catalyst Initiative (VCCI) fund-of-funds, which HarbourVest has helped deploy, is a prime example of how to incentivize greater private investor participation in domestic VC. Toomey expressed belief that Canada should deploy similar initiatives for other stages and parts of the economy.
While VCCI’s latest iteration, the $1-billion CAD Venture and Growth Capital Catalyst Initiative (Growth VCCI), is currently on the way, exactly when remains unclear. Sarah Pisonero, director of government funds at the Business Development Bank of Canada, which manages VCCI, said on stage that Growth VCCI will be launched “pretty soon.”
“It’s still a strong priority for government,” Pisonero claimed. GPs and LPs in the room who BetaKit spoke with still have no idea when that promise will come to fruition.
Feature image courtesy CVCA.