Manitoba’s newly formed venture capital fund — Manitoba First Fund — has made its first investment of $25 million with the veteran Saskatchewan venture capital money manager, WestCap Management Ltd.
WestCap is forming a dedicated $60-million Manitoba fund, called Connect Manitoba Growth Fund, along with about $30 million of investment from four Manitoba credit unions, led by Access Credit Union.
The Manitoba fund will invest in later-stage growth companies that have market acceptance for their product or service.
MIKAELA MACKENZIE / WINNIPEG FREE PRESS
Premier Heather Stefanson announced new funding for the Manitoba Venture Capital Fund at their soon-to-be headquarters on Lorimer in Winnipeg.
Grant Kook, who has led WestCap for 25 years, out of Saskatoon, and whose five funds manage about $1 billion in assets, said his sweet spot will be investments of between $2 million and $6 million in Manitoba companies.
“Our expertise is investing in those types of companies,” Kook said at a news conference at the site of Manitoba First Fund (MFF) offices in the southwest end of the city.
“It also aligns with the risk that the credit unions want to take,” Kook said.
It will invest in sectors such as agriculture, manufacturing and processing.
“We like innovative companies whose product has been proven out and have market acceptance, but need capital for accelerated growth to take their companies to the next level,” he said.
Premier Heather Stefanson attended the news conference. Her government announced an additional $50-million investment in the Manitoba First Fund in last week’s budget, bringing the province’s commitment to the fund to $100 million.
The province’s move into venture capital investing — which it has not done since the Crocus Investment Fund went into receivership 15 years ago — is to help Manitoba companies deal with the lack of access to capital — a sore point for many years.
Kook quoted recent data from the Canadian Venture Capital Association that said of the $7.2 billion of private equity invested in Canada in the first three quarters of 2022, only 0.3 per cent of it came to Manitoba.
“The Manitoba Connect Growth Fund is here to help change that stat,” he said.
The MFF — which is looking to hire a professional manager — will invest in professionally managed funds that will bring their own capital to leverage the impact of the province’s investment. Those independent funds will invest in specific Manitoba companies and MFF — which will have two of five board members chosen by the province — will only invest in professionally managed funds like WestCap.
While Connect Manitoba Growth Fund will not address capital needs of early stage or startup companies, Mike Pyle the chairman of the board of MMF, said other funds, which will handle every stage of capital needs, will come on.
Larry Davey, president and CEO of Access Credit Union, the largest in the province — which is finalizing mergers with Amaranth, Carpathia and Casera credit unions — said the move into this type of venture capital investing has been in the works for a few years.
Access has invested in Manitoba companies with WestCap in the past.
MIKAELA MACKENZIE / WINNIPEG FREE PRESS
Grant Kook, who has led WestCap for 25 years, out of Saskatoon, said his sweet spot will be investments of between $2 million and $6 million in Manitoba companies.
He said he expects more Manitoba credit unions will want to participate after the fund gets going. Fusion, Sunrise and Stride credit unions are joining Access as initial investors.
“At the end of the day, all credit unions are looking to determine the best way to support their members,” said Davey. “It’s frustrating when you can’t help members when they need the support. We definitely have members that will be able to take advantage of this fund.”
Kook said having credit unions as partners means the fund will have feet on the ground in communities across the province.
Connect Manitoba Growth Fund will set up an office in Winnipeg soon, with an initial staff of one or two people.
Kook and WestCap have a good perspective on the Manitoba economy. It already owns a stake in a few companies from this province, including Librestream and Fort Garry Brewing.
Kook said the deal flow is expected to be strong.
“It will be diversified in that respect because we will not have geographic diversification,” said Kook. “Every investment we make will be in only Manitoba companies.”
While it will focus on established companies, Pyle said the MFF has been in discussions with four or five other funds, including an early-stage technology fund out of Alberta, and another Saskatchewan fund.
“We have not finished our due diligence with them yet. That’s why the province stepped up with the second batch of capital,” he said. “There’s nothing worse than getting started and then running out of money right away.”
martin.cash@freepress.mb.ca
Martin Cash Reporter
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
