Pension Pulse Poppycock

The world is full of bloggers; not the folks who think 140 characters of wit counts as blogging, mind you. I’m referring to the people who genuinely ply the trade, 500 or 1,200 words at a time, with real research or insightful commentary that’s grounded in their own area of professional or personal expertise.

We fellow travellers in this thankless task generally get along famously; who better to understand the fruitless exercise of writing into the ether than a fellow blogger? This rule of thumb was recently bruised broken when one of them, a guy named Leo Kolivakis, decided to take a crack at me in response to my most recent post regarding the CPP Investment Board (see prior post “CalSTRS exec gives a frank assessment of CPP Private Equity portfolio” July 15-14). His form of blogging seems to amount to reposting long articles from the media or industry press releases, and then dropping in his commentary here and there. Everyone has their own style.

He writes that he doesn’t “like” me. He’s not the first, and won’t likely be the last, unfortunately. Having not ever met the man, nor any of his friends or family I suspect, it seems quite judgmental if this silly blog is the source of his distain. He may well hate Billy Bishop Toronto City Airport, which I am blamed for from time-to-time, despite its 1939 founding; but, even then, I get along with lots of folks who take issue with the BBTCA (even the jet angle). Perhaps he’s a devotee of Kevin O’Leary (see representative prior post “Highlights of our Kevin O’Leary Blog Posts” Sept. 27-12). I suppose it doesn’t much matter; “haters are gonna hate” as they say.

My fellow blogger goes on to make clear that CPPIB is “a subscriber” to his blog. His Pension Pulse website states that institutions voluntarily pay $500, $1,000 or $5,000 a year for his posting efforts. There’s even a helpful “subscribe” Paypal button for those who don’t have a cheque writing machine. If only I’d known that this is how you can turn blogging into a profit centre: just put your hand out. If you tech entrepreneurial types had the same resources as the institutional investors that Leo’s writing for I might have been able to retire by now.

I appreciate Leo’s disclosure about his commercial relationship with Canada’s pension plan manager; transparency is key in life. Leo goes on to detail his apparently close relationship with CPPIB CEO Mark Wiseman. According to Leo, they emailed back and forth about the blog in question; let’s be honest — not everyone can get instant email responses from the CEO of a $200 billion fund. This Leo obviously has the attention of some members of the pension industry. Mr. Wiseman advised him that he hadn’t read the post, which is of great relief to me. If all of you would just join him and ignore the drivel herein, I could stop writing altogether (the reader I randomly met in a Costa Rican pool on March Break will attest to this speech: the sooner y’all stop wasting your time, the sooner I can hang up the blogging skates). Mr. Wiseman doesn’t have time to waste, which is one of the many reasons why he runs CPPIB and you don’t.

Perhaps Leo’s 21 months as a consultant at the Business Development Bank of Canada, where he was partly responsible for drafting its annual corporate plan during 2008-10, might explain his distain of this space (see prior representative post “C.D. Howe report recommends BDC mandate shake-up” Feb. 7-13).

Leo is quite confident that he can still be critical of CPPIB when required, despite his financial ties. The fact that he thinks my CPPIB analysis is flawed is, no doubt, completely unrelated to that fact that he’s on their payroll. The Globe and Mail didn’t find any such flaws, mind you. Since we all own the CPP’s assets, I suppose it is nice to know another fellow who is on our collective payroll. The good news is that his $5,000(?) annual fee isn’t so large as to have contributed materially to CPPIB’s outsized management expense ratio (see prior representative post “Why is CPPIB’s MER higher than its peers?” Jan. 9-13).

What’s really troubling about this fee-for-service arrangement is that Leo doesn’t come across as a very good analyst. His attempted knee-capping is rife with errors, flawed analysis and unsupported conclusions.

If he’s going to try to show his patron at CPPIB that he’s an effective hitman on their behalf, which may well be why he gave Mr. Wiseman the heads-up about his plans for a takedown, you’d think he’d be a bit more careful about doing some exacting research and nailing down his arguments prior to pulling the trigger. But, as we’ve come to learn, far too many “analysts” come off as CPP cheerleaders; even those who claim to be visionaries of the pension industry (see prior post “Professor Kesselman’s arguments for “Big CPP” don’t hold water” Nov. 26-13).

Here are a few of the quick highlights of Leo’s flawed analysis:

He starts off by saying that I have an “axe to grind”, which is a traditional slur used to undercut everything that someone writes on the basis that they have a hidden agenda. I’ve never thought any of ~2,500 blog posts I’ve written was driven by an agenda per se. A theme, perhaps, about honesty, transparency, fair dealing and so forth. But not an “agenda” in the political or commercial sense of the word. If I did have a agenda, surely I’d be falling all over myself paying CPPIB compliments left, right and centre in the hopes that they’d hire me to manage a few crumbs on their behalf.

Leo might have missed them, but many a positive word has been written here about CPPIB over the years. I was a fan of the 2009 Skype investment, I posted about the huge private equity NAV gains in 2010, CPPIB’s 10 year results exceeding the median found praise, as did the position it took on Income Trusts, for example.

It seems that Leo is confusing opinions on topics such as Management Expense Ratio, Value Add, exec comp, asset allocation choices and transparency/governance with an anti-CPPIB “agenda”. Perhaps that’s because no one on Bay Street says any of this publicly, but these topics are definitely yakked about over lunch or drinks by many a fund manager, trader and i-banker, albeit off the record, as MSM journos will attest.

Leo has no reason to know this, but the agency was practically founded by one of my Bay Street mentors, the late John MacNaughton, CM; attacking his creation for blogging fodder would be counterintuitive. As I like to remind everyone, these folks work for us, and we shouldn’t be browbeaten for asking good, respectful questions. Mr. MacNaughton never thought so, anyway; “that’s what makes a democracy”, he once said to me.

Leo on CPPIB investing in venture capital:

Most public pension funds are going to lose their shirts investing in VC. Anyways, all this to say that while McQueen wants CPPIB to invest directly in VC funds, I think he’s nuts and the evidence doesn’t support his case. Even if CPPIB did invest directly in VC and made money (a big IF), it would be peanuts in terms of the overall portfolio and wouldn’t make a big difference in terms of value add.

Perhaps Leo is new to this pension fund analysis gig, so we’ll cut him some slack. But he’s wrong nonetheless about “most public pension plans are going to lose their shirts investing in VC.” CPPIB, for example, has long invested in venture capital — does that make Mr. Wiseman and his predecessors “nuts”, Leo? CPPIB’s first direct Canadian VC commitment was back in 2000, seven years before this blog got started, and nine jobs/contracts ago for Leo (via LinkedIn). CPPIB committed directly to many Canadian VC names back then:

$50 million into Edgestone Venture Fund I; $25 million into Skypoint Telecom Fund I; US$13.5 million for Celtic House VP Fund II in 2002; $50 million for Celtic House’s follow-on Fund III; $50 million again into Edgestone Venture Fund II; $50 million for Ventures West 8 in 2003. There was also an indirect strategy, which was initially managed by Edgestone Partners until Northleaf took it over circa 2005.

Northleaf is currently managing a newish ~$150 million Canadian VC allocation for CPPIB, as part of a $400 million PE/VC Canadian Fund-of-Fund vehicle, although it has proven to be hard to track deployments (see prior post “Has anyone seen CPPIB’s venture bucks?” Nov. 2-12). What’s more, Leo, Mr. Wiseman actually thinks this is a good time to be investing new capital in the VC space. This is what he told Boyd Erman at the Globe, in February 2010:

“We believe that there’s an opportunity because we believe there are going to be excellent returns.”

As for most pension plans “losing their shirts” on venture capital, many of the largest plans in the world have made great money on the asset class, enjoying returns that are higher than private equity over the long term (see representative prior post “Buyout vs. Venture returns” Feb. 20-08). In Canada, OMERS has attracted plenty of attention with its $200 million direct VC strategy, and while some Canadian plans have backed out of the assets class (such as Ontario Teachers), several well-known American plans have been backing venture funds for decades.

The Washington State Investment Board’s VC portfolio has returned a multiple of capital of 1.5x since inception, for example. Exactly the same 1.5x multiple as both its “Large Buyout” and “Mid Buyout” investments, which include Apax, GTCR, KKR, TPG, Welsh Carson…. The same positive return, Leo. Do your homework!

Leo on direct versus indirect investing at CPPIB:

And unlike other large Canadian pension funds, CPPIB doesn’t invest directly in private equity or real estate (only in infrastructure).

Really? According to page 51 of the current annual report, Leo, CPP has just under $20 billion in “principal investments” within the Private Equity world. Those are directs (including co-invests), and don’t include our indirect PE exposure via our $38.5 billion of fund commitments.

Leo on CPPIB’s allocation to mega buyout private equity funds:

He’s right that CPPIB “doubled down” on buyout funds at the worst possible time but that’s because assets under management were ballooning at the time so they had to invest more in private equity.

At least we agree on something. What Leo has wrong is the claim that this happened because CPPIB’s “assets under management were ballooning at the time so they had to invest more in PE.”

To borrow from Don Drummond, another economist, “math is math.” Here’s some math for Leo to noodle.

According to CPPIB’s financial statements, total assets under management grew by $35 billion between 2004 and 2009 (about 50%). During that window, new CPPIB commitments to private equity funds amounted to $23.9 billion, while our actual “invested” PE portfolio grew by about $12 billion.

Remarkably, CPPIB committed more money to new PE funds between 2004 and 2009 than what Canadians were actually contributing to the CPP via source deductions and employer contributions. Here’s an analysis of “New PE Buyout Fund Commitments as a percentage of Net Contributions by Canadians and Canadian employers”:

2004: 13%
2005: 89%
2006: 189%
2007: 88%
2008: 107%
2009: 8%

You can see a table of the data here:

CPPIB PE flows

Surely Leo has reviewed the same CPPIB financial statements that we all have access to online. As such, I’m not sure how he could miss the fact that although our CPP assets grew quickly during that period, there were years where CPPIB was committing more to PE than they were actually taking in. Is that the “ballooning” that Leo was referring to?

One could observe that the investment cycle of PE is such that it takes years to deploy the capital once it has been committed. This is true, but as a percentage of assets under management, drawn PE dollars grew from 2.6% to 13.4% during this period just the same. We are talking invested dollars, not dollars that have been committed and not yet drawn by our 3rd party fund managers. Which means that our invested PE allocation, as a percentage of assets under management, grew more than five times during what Leo refers to as “the worst possible time”. We didn’t just “invest more” on a pro rata basis as the cash rolled in, as Leo claims. CPPIB increased its allocation five fold.

Thus the double-whammy to our financial statements, which may be one of the reasons why the CPPIB team generated negative value add for the four years ending 2013 (see prior post “CPP Investment Board has produced $1.8 billion of negative value-add over a four year period” May 20-13), as well as the 2014 fiscal year (after expenses).

Leo on the wisdom of CPPIB’s concentration in Private Equity:

Importantly, in markets where public equities roar, CPPIB will typically underperform its Reference Portfolio but in a bear market for stocks, it will typically outperform its Reference Portfolio. Why? Because private market investments are not marked-to-market, so the valuation lag will boost CPPIB’s return in markets where public equities decline.

There are two pretty big embarrassing problems here for Leo.

First, his suggestion that “private market investments are not marked-to-market” is just plain wrong. I’m neither an economist nor an accountant, but according to Accounting rule FAS 157, it’s a requirement (see prior posts “Accountants are failing investors with “fair value” accounting” Aug. 6-07, “D’Alessandro: fair market value accounting is ‘perverse’” Sept. 30-08, “New accounting rule adds to LBO pain” Mar. 2-09). And it’s been that way for years and years.

Second, I see no evidence to Leo’s assertion that CPPIB will “outperform its Reference Portfolio” during a bear market due to its large concentration in private equity assets. Perhaps there’s some academic support for the theory, but it didn’t play out in reality: during the “bear market” of 2008-09, which is one of the worst market windows since the Great Depression, CPPIB lost 18.6% (as of the FYE March 31, 2009). On a gross basis, the CPP fund met its Benchmark return, but after including the expense of the team managing the portfolio, CPPIB’s asset allocations and overall structure produced “negative value add” of about 15 bps, according to the 2009 financial statements. In a period where Canadian public equities lost 32.3%, for example, the structure didn’t perform in the manner that Leo says it will during a the next bear market. Let’s hope he’s right on the next one.

Leo can blame a “tough to beat” reference portfolio, but in 2010, for example, CPPIB’s performance was in the bottom decile according to RBC Dexia’s stats for pension plans (see prior post “CPPIB’s 2010 results put pension fund in bottom decile” May 21-10). And these are funds with allocations to private equity, real estate, bonds, hard assets and public equities; the same kinds of assets that CPPIB is buying.

I could go on, but unlike Leo, no one is paying me to blog. ;-)

Canadians are well-served by a thorough, healthy discussion about our collective retirement tools. The Fraser Institute provided its timely perspective a few months ago, for example. What undercuts the debate is specious analysis, rabid cheerleading and bromides.

(this post, like all blogs, is an Opinion Piece)

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Halogen’s valuation shadow could undercut Canada’s tech IPO momentum

The deals are there for Canadian technology companies and its broader ecosystem, that’s for sure.

Kinaxis (KXS:TSX), Critical Control (CCZ:TSX), DIRTT (DRT:TSX) and Espial (ESP:TSX) have all raised equity via public offerings over the past few weeks. And that’s just a representative list of Canadian-based tech firms which have been able to get something done in what I’ll call a less-than-perfect capital markets environment. The NASDAQ hasn’t been playing ball — slowing the U.S. tech IPO market to a trickle. U.S. SaaS multiples have contracted (although they don’t look horrible from an issuer’s standpoint), and several previous local IPO offerings haven’t yet produced sustainable gains for their IPO investors.

Names that come to mind include Difference Capital (DCF:TSX), Halogen Software (HGN:TSX), NexJ (NXJ:TSX), ViXS (VXS:TSX) and so forth. And while there’s nothing unusual about shares not going straight up post-IPO, one name in particular is drawing undue attention. And it may have a negative impact on the TSX for some time to come.

It seems that Halogen’s current valuation has raised concerns within certain corners of the American VC and Growth Equity community. The issue is simply Halogen’s crappy valuation as compared to the direct comps that trade on American stock exchanges. Halogen remains a growth story, and is largely playing out as promised on last year’s roadshow. Which makes it even harder for U.S. VCs with private Canadian tech investments to ignore that the stock is now trading around eight bucks, well below its $11.50 IPO price; this for a stock that hit $15.75 at one point last summer. Why list in Canada, they ask, if they undervalue our best investments?

Why does any of this matter? Simply because this Halogen situation is bouncing around Bay Street like a pinball, as investment banks firms pitch Desire2Learn, Hootsuite, Shopify and Vision Critical on the comforts and appeal of the TSX. There hasn’t been any punative pushback just yet, but some U.S. VCs have definitely soured for the moment on the concept. 10 years ago, Silicon Valley VCs were thought to see the entire Canadian public market as being just one big “Vancouver Stock Exchange”, and the TSX was rarely listed as a “qualified stock exchange” in U.S. VC-driven shareholder agreements; even when the investee company was Canadian-based.

Many private company CFOs will tell you that they’d like to list their companies on the TSX for patriotic reasons. They know, better than anyone, how important it is to have a robust local capital ecosystem. They don’t decide in a vacuum, however, since most VCs (particularly those with a Board seat) retain the right to approve an ultimate liquidity event. For the companies that aren’t big enough to attract Wall Street attention, the issue is moot. But its the large tech names that have the luxury of choice, and valuation is a (the?) key factor before deciding “to go out the door.”

The idea that the TSX is Siberia of stock exchanges for good tech companies is no more. But Halogen’s lacklustre trading over the past 90 days, through no fault of its own, might just set the local market back ten years if the quote doesn’t self-correct soon.

(disclosure: CCZ is a Wellington Financial Fund II portfolio company; Vision Critical is a Fund III portfolio company; I own ESP and HGN)

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CalSTRS exec gives a frank assessment of CPP Private Equity portfolio

Stupid as it has been for me to turn a critical eye onto the CPP Investment Board over the past seven years, there been some third party validation of late of much of the analysis and commentary that has me in the doghouse in certain quarters.

First, we had the Globe and Mail finally bearing down last month on some of the many topics and issues you’ve read about over the course of seven long years. Today’s validation comes via the Director of Private Equity at California State Teachers’ Retirement System as she weighs in, too; albeit indirectly. CalSTRS, with $189 billion under management, describes itself as “the largest educator-only pension fund in the world” and is very much a peer of Canada’s CPP in terms of size and asset allocation strategy.

CalSTRS has US$21 billion of private equity exposure; a smaller allocation than CPPIB’s $41 billion, but still chunky enough to give CalSTRS every reason to be transparent with its stakeholders about how that investment is doing, and where it is headed over the coming years.

Courtesy of a forthright interview with Buyouts Magazine, we can glean a frank assessment of how CPP’s (ie. our) mega buyout portfolio is doing too, since we share many of the same “2005-2008″ private equity fund commitments that CalSTRS invested in.

I know it’s not from our own fund managers, but here’s the news nonetheless, from Margot Wirth of CalSTRS (H/T again to Reuters):

- CalSTRS has a “very high exposure to those types of funds”, and will be reducing them going forward
- “Those vintages are not going to end up terrible” in terms of financial returns
- “2005 to 2008 account for 65 percent of the portfolio’s estimated $21 billion private-equity exposure”
- “many of those funds have performed poorly relative to benchmarks”
- CalSTRS “plans to put more emphasis on small and mid-market buyout, debt-related and emerging market funds”
- “Room for the pivot will be made by reducing the size of commitments to large buyout funds”
- CalSTRS “already has exposure to emerging managers and niche strategies through its $818 million Private Equity Proactive Portfolio. That program had been managed by a dedicated staff operating independently of the rest of the private equity team for most of the last decade. CalSTRS has spent the last year integrating that staff into its main private equity team, moving Proactive opportunities through the same due diligence process used for larger, more established managers.”

There you have it. As detailed and clear a discussion as a stakeholder could hope for about the state of the allocation and the plans for the near term. Via the media. Imagine what we’d learn if the Canadian scribes did a little less cheerleading and a bit more analysis about one of the largest buckets of investment capital the world over.

What we can deduce, according to CalSTRS, is that many of CPPIB’s 2005-2008 mega private equity commitments “have performed poorly relative to benchmarks.” Funds that Ms. Wirth is referring to likely include many of the big names, as these are PE vehicles that both CPP and CalSTRS are currently invested in (based upon public disclosure):

Apax Europe VII (2007), Apollo VI (2005), Apollo VII (2007), Blackstone Capital Partners V (2005), Blackstone Capital Partners VI (2008), CVC European Equity Partners V (2008), First Reserve Fund XI (2006), First Reserve Fund XII (2008), FountainVest China Growth Fund (2008), Hellman & Friedman Capital Partners VI (2006),
Hellman & Friedman Capital Partners VII (2009), Hony Capital Fund 2008 (2008), Onex Partners III (2008):, Providence Equity Partners VI (2006), TPG Partners V (2006), TPG VI (2008), and Welsh, Carson, Anderson & Stowe X (2005).

We have billions and billions in these funds. Not that this is news to you, since you were well apprised as we went from allocating $1-$2 billion to external private equity funds to $8 billion per annum around the time that Mark Wiseman took over as SVP and Head of CPP Private Investments (see representative prior posts “Doubling Down on Private Equity at CPP Investment Board” Feb 20-09 and “61% of CPPIB Private Equity Commitments sampled are currently below solvency threshold” May 21-13). CalSTRS wasn’t the first big pension plan to make the point that we’d bought a bad batch, but they are definitely the first that I’ve seen who are actually investors in these particular funds. AIMCO’s CEO beat them to the punch, but CalSTRS deserves full credit for not mincing words (see prior post “AIMCo’s take on PE marks stark contrast to CPPIB” Aug 24-11).

Some will say that it isn’t Mr. Wiseman’s fault that 2005-08 turned out to be substandard vintage years for the mega buyout world. I agree, but the CPPIB’s team did dramatically increase our allocation — in both relative and absolute terms — to this asset class at absolutely the wrong time. Again, who knew? But the management and Board of Directors continue to refuse to provide clear disclosure about the true IRR financial performance of these funds, unlike CalSTRS, CalPERS, Oregon, WSIB and so forth (see prior representative post “CPPIB should take a page from Oregon’s book” Sept. 12-10). That can’t be blamed on back luck or third party LBO managers.

As for putting more of a focus on smaller and more diverse fund strategies, which is clearly underway at CalSTRS, CPPIB has been going the opposite way for as long as I can remember. This has always been a key concern of mine, as longstanding readers may recall. From 2007:

I cannot accept the argument that they are now “too big” to directly back Canadian VC funds. It takes just a few hours a year to monitor a fund once you’ve done the initial due diligence and made the commitment.

CalSTRS is making changes in how it interacts with smaller funds too, as they have taken steps to directly manage the “emerging manager”, small cap PE or VC universe, rather than outsource that to a Fund-of-Fund manager, ala CPPIB.

Most fascinating of all perhaps, is that CalSTRS is admitting to these concerns, and making immediate adjustments, despite turning in a return of 18.7% in its most recent fiscal year. Well ahead of CPPIB’s 16.5% number. Over a 10 year basis, CalSTRS’ return is 60 basis points higher than CPPIB’s (7.7% versus 7.1%); with that kind of enhanced performance, CPP could reduce payroll taxes for Canadian employers and workers, for example.

Sixty bps is quite the incremental value-add over an extended period. I can’t be sure if the premium performance directly leads to more transparency around how the assets are doing, but Canadians definitely benefit from the U.S. culture of complete disclosure from many of their pension stewards (see representative prior post “12 questions CPP Investment Board won’t be answering on BNN today” Jan. 17-13).

And for that we are grateful.


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Murray pays the price for Ontario government’s $500M MaRS scandal

There were plenty of casualties in the recent Provincial election; some deserved and some not. This post tries to give you some background on one of them.

It has been about two months since it came to light that the Provincial Liberals were in the process of forking over $500 million to bail-out the guarantee provided by MaRS to a U.S.-based real estate developer. To put that figure in context, in January, Premier Wynne committed a paltry $36.3 million in total over the next five or so years to the Venture Catalyst Fund, the successor to the Ontario Venture Capital Fund (see prior post “Northleaf’s Venture Catalyst Fund gets to work” Feb. 27-14). Compare that to a $90 million commitment to OVCF under Dalton McGuinty in 2008. The new NVCF commitment works out to a Provincial investment of about $7 million per annum into primarily Canadian VC funds that are then to invest in job-creating entrepreneurial ventures.

A pittance as compared to the MaRS’ bricks-and-mortar bailout, which is why the ecosystem got so irate when the news broke, as captured on the chat pages of StartUpNorth and our own comment section.

It came as no surprise to some of us that the MaRS II project was missing a key ingredient: tech start-up tenants. When the project was announced, it seemed to me that MaRS II was the government’s idea of an immediate and tangible election-ready response to the McGuinty/Duncan-initiated innovation crisis that has been underway in the Province for at least half a decade. Of that there can by little doubt (see prior representative posts “Ontario politicians asked to address deteriorating VC climate” Oct. 1-07, “The great LSIF myth” July 2-08, “UAE’s Sheikh Khalifa Fund vs. Ontario’s OVCF” Jan. 10-10, “Summing up Ontario’s VC industry in 5 minutes flat” Jan. 31-10).

The current version of the Provincial Liberals didn’t make good on the prior McGuinty election promise of an Angel Tax Credit program (ala British Columbia), nor did it reverse Dwight Duncan’s sacrifice of the effective Ontario Emerging Technologies Fund to help reduce the government budget deficit (see prior post “Ontario government puts $250M Emerging Technology Fund on ice” June 21-12). The very OETF that the Liberals put in place, along with OVCF, after they cancelled the LSIF program with the promise that they had a better way to get capital into the innovation economy.

The only quasi-new idea that the government has introduced of late has been “corporate welfare” for firms that promise to create IT jobs in Ontario. First to the trough was Open Text, which has its HQ in Waterloo (no more Samsung’s, our tax dollars are going to folks who are already here). For $120 million in public funds, Chairman Tom Jenkins promised to create 1,200 jobs in Waterloo, Richmond Hill, Kingston, Ottawa and Peterborough over the next seven years. Now, $120 million may not seem like a lot of money to you, given your sense of the size of OTC. But on $451.7 million of pre-tax earnings over the 2011-13 fiscal years, Jenkins et al only paid $54.79 million in corporate tax: an average effective rate of 12.1%. Interestingly, $120 million equals almost exactly the amount of aggregate tax Open Text will pay to all governments over a seven year period, assuming its 3-year average carries on. $120 million is also more than 3x Premier Wynne’s parsimonious commitment to NVCF.

Was this $120M taxpayer gift a form of payback for the fact that Open Text was the only non-FI corp to participate in January’s NVCF launch, with a ~$20 million LP commitment? Perhaps it would be more appropriate to say that the Province and OTC have a strong business relationship. Although, according to rumours swirling in Waterloo, not so strong as to keep Mr. Jenkins from recently declaring Alberta as his residence for personal tax reasons after being a proud member of the K-W area for decades.

Cancelled programs, reduced budgets, misguided tax spending…. As the former MRI boss himself, Minister Murray would have been well-aware of these multi-faceted machinations. Which practically forced his hand one can only assume, as Minister of Infrastructure, when the MaRS team told the Cabinet they were keen on phase two.

I appreciate how angry the Premier was as this MaRS stuff broke during the topsy-turvy election campaign. So, once she’d prevailed in the election, it appeared as though she was looking for a scape-goat, and Transportation and Infrastructure Minister Glen Murray stood out as the most obvious candidate.

Near as I can tell, that’s the only explanation for his move from the Transportation/Infrastructure portfolio, which he loved and allowed his “builder” juices to flow, to Environment, which is seen to be far less important and influential in the halls of power. One can’t forget that it was Premier Wynne herself who promoted Mr. Murray into Transport/Infrastructure in the first place as his reward for being the first leadership candidate to withdraw to support her in last year’s convention.

Unhappy to be carrying the can for seven years of mismanagement on the Innovation front, Minister Murray announces that he’s retiring from politics four years early; having just won re-election. That goes to show you just how bitter the pill was.

After years of failures and false-starts at Queen’s Park, Ontario’s innovation ecosystem knows the taste of a bitter pill only too well. The only difference is, if we all quit and find something else to do, Ontario’s hope for ever building a sustainable “new economy” is in tatters.

(this post, like all blogs, is an Opinion Piece)

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Not so much a Blogging strike as a second guessing….

As my niggling concerns about the true utility of blogging grows, despite almost eight years of dutiful service, I’ve been negligent of late.

The pros and cons of the entire exercise are becoming more stark as the years go by, and I’ve frankly not quite been able to chin up to yet another post with all of that swirling in my mind. The fact that the august New York Times referred to this space last summer as being “widely followed in the Canadian financial community” cuts both ways. Taking a few days of holidays hasn’t helped either, given the perspective that comes with some time to reflect.

There’s been plenty of blogable gruel, too, what with the Ontario provincial election, ravenous new competitive products and activities within the Business Development Bank of Canada’s lending group, CPPIB’s 2014 financial results, CNBC showcasing our very own Kevin O’Leary, more signs of heady times in the U.S. bank lending market, CPP Investment Board finally receiving a critical review from the DTM, and so forth. Over the next few days, I promise to tackle them all.

Unless, of course, it all comes to a more formal, shuddering halt in the meantime.


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