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Freeland promises 'truly massive' investment in green economy, including EV production in Windsor – Windsor Star

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Deputy prime minister Chrystia Freeland, in a campaign stop at the University of Windsor on Thursday, promised “truly massive” investment to shift to a green economy, including electric vehicle and battery production here, if the Liberals are re-elected.

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“One of the core planks in our platform is truly massive investment in Canada’s green transition,” said Freeland, who was finance minister in the Liberal government.

It’s the right thing to do for the planet and for future generations, she said.

“But investing in the transition to a green economy is also absolutely critical for Canada’s economic future,” she said.

Citing the G7 and G20 finance ministers meetings this summer, she said, “The industrial economies of the world have made the choice to shift to an economy not based on fossil fuels, to a clean and green economy.

“We can either be in the forefront of that green transition or we can be left behind. The simple economic reality is if we do not invest really meaningfully in the green economic transition today, no one will buy the things that we make. And Canada is a trading nation. We need the world to buy our stuff.

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“Windsor knows that very, very well. We need to help you make clean, green things that the world wants.”

Local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, attend a press availability with Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, at the University of Windsor, Thursday, September 2, 2021.
Local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, attend a press availability with Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, at the University of Windsor, Thursday, September 2, 2021. Photo by Dax Melmer /Windsor Star

Investing in electric vehicles and the supply chain to support them is one of Mayor Drew Dilkens’ five priority issues in the campaign.

Freeland, who met with leaders from industry, labour, the university and college, United Way and UHC Hub of Opportunities, also addressed the global shortage of semiconductor microchips that has repeatedly shut down auto production here.

“There needs to be more emphasis on resilience in supply chains,” she said.

Depending on just-in-time delivery with supply chains that stretch around the world creates “rifts and vulnerabilities,” she said.

There’s a growing view calling for “friend-shoring” — supply chains that connect countries that are geographically close and are also political allies. For Canada, that means the United States.

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“I think working on that has real, real promise for the Canadian economy and for the people of Windsor,” she said.

Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, speaks during a press availability with local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, at the University of Windsor, Thursday, September 2, 2021.
Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, speaks during a press availability with local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, at the University of Windsor, Thursday, September 2, 2021. Photo by Dax Melmer /Windsor Star

Freeland, on her first campaign stop since the Liberals released their platform Wednesday, also pitched the Liberals’ $10-a-day child care. The government has already reached agreements with eight provinces and territories covering 40 per cent of Canada’s children. But there is no agreement with Ontario yet. The program is particularly important for Windsor, which has a one of the highest rates of child poverty, she said.

High-quality, affordable child care would offer all children “the best possible start in life,” and it would offer all parents the opportunity to improve their education and skills and get jobs, she said.

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She called it “transformational for this community.”

Establishing Ojibway National Urban Park is also “definitely a priority for our government,” Freeland said.

A re-elected Liberal government would also invest an additional $6 billion in health care to clear surgery backlogs in hospitals caused by the pandemic, she said.

Asked to respond to COVID-19 vaccine protesters who have rallied in Windsor and across the country and mobbed Prime Minister Justin Trudeau’s campaign stops, Freeland said, “It’s not only appropriate for governments to introduce strong vaccine mandates, it would be wrong to do otherwise. We do not let a person drive their car while they’re drunk, and we should not let a person who hasn’t been vaccinated get on a plane and sit in a small space next to other people. The time has come for governments to say this is it. If you don’t want to get vaccinated, you can not participate in the life of the community because you are making the choice to endanger other people in the community.”

ajarvis@postmedia.com

Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, speaks during a press availability with local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, at the University of Windsor, Thursday, September 2, 2021.
Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, speaks during a press availability with local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, at the University of Windsor, Thursday, September 2, 2021. Photo by Dax Melmer /Windsor Star
Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, waits to speak during a press availability with local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, at the University of Windsor, Thursday, September 2, 2021.
Chrystia Freeland, Deputy Prime Minister and Minister of Finance and Liberal candidate for University-Rosedale, waits to speak during a press availability with local Liberal candidates, Irek Kusmierczyk and Sandra Pupatello, at the University of Windsor, Thursday, September 2, 2021. Photo by Dax Melmer /Windsor Star

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Surge Closes Investment into Contractor Connect – Business Wire

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DALLAS–(BUSINESS WIRE)–Surge Private Equity LLC (“Surge”) announces investment into its 10th platform, Contractor Connect LLC (“CC” or “Company”), a B2B networking lead-generation platform within the home improvement and remodeling space. The transaction closed with debt financing provided by Modern Bank and Assurance Mezzanine Fund with BakerHostetler acting as lead counsel.

Since its founding in 2014, CC has connected hundreds of thousands of homeowners to local contractors through its proprietary lead aggregator, screening, and live-transfer platform. The Company primarily specializes in various home remodeling verticals including bathrooms, windows, roofs, gutters, and sidings. Its recognized brand is highly regarded across the 25+ states it currently serves. Founder Joseph Powless will remain on as both an owner and partner of the Company.

“COVID has accelerated work from home hybrid and full-time trends. People are now spending more time at home, increasing the demand for home improvement,” said Surge Founding Partner Thomas Beauchamp. “This sustained macro demand for the industry paired with our plan to launch into new verticals such as HVAC and solar give us a clear pathway to sustaining the historical 25% annual growth rate.”

About Surge Private Equity

Surge Private Equity is a Dallas-based private equity firm that seeks majority investments in growing businesses with $2-7.5MM of EBITDA. Together with its lending partners, Surge provides entrepreneurs with liquidity and investors with higher yields and greater accessibility through lower investment minimums. Surge primarily invests in companies where the seller will remain in an ongoing capacity.

About Modern Bank

Modern Bank, N.A. is a privately owned, entrepreneurial bank that provides flexible, competitive, and reliable senior debt financing solutions to commercial companies. Its experienced bankers specialize in working with lower middle-market companies and owners to provide low-cost cash flow-based financing solutions.

About Assurance Mezzanine Fund

Assurance Mezzanine Fund is a private investment firm providing $3 to $20 million customized growth capital solutions to profitable, lower-middle-market companies nationwide. We look to invest our funds in established companies operated by experienced and proven management teams with a history of building enterprise value.

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Have a large amount of cash to invest? Here's how deploying it all at once compares with doing so over time – CNBC

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Valeriy_G | iStock | Getty Images

If you have a big wad of cash to invest, you may wonder whether you should put all of it to work immediately or spread out over time.

Regardless of what the markets are doing, you’re more likely to end up with a higher balance down the road by making a lump-sum investment instead of deploying the money at set intervals (known as dollar-cost averaging), a study from Northwestern Mutual Wealth Management shows.

That outperformance holds true regardless of the mix of stocks and bonds you invest in.

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“If you look at the probability that you’ll end up with a higher cumulative value, the study shows it’s overwhelmingly when you use a lump-sum investment [approach] versus dollar-cost averaging,” said Matt Stucky, senior portfolio manager of equities at Northwestern Mutual Wealth Management.

The study looked at rolling 10-year returns on $1 million starting in 1950, comparing results between an immediate lump-sum investment and dollar-cost averaging (which, in the study, assumes that $1 million is invested evenly over 12 months and then held for the remaining nine years).

Assuming a 100% stock portfolio, the return on lump-sum investing outperformed dollar-cost averaging 75% of the time, the study shows. For a portfolio composed of 60% stocks and 40% bonds, the outperformance rate was 80%. And a 100% fixed income portfolio outperformed dollar-cost averaging 90% of the time.

The average outperformance of lump-sum investing for the all-equity portfolio was 15.23%. For a 60-40 allocation, it was 10.68%, and for 100% fixed income, 4.3%.

Even when markets are hitting new highs, the data suggests that a better outcome down the road still means putting your money to work all at once, Stucky said. And, compared with investing the lump sum, choosing dollar-cost averaging instead can resemble market timing no matter how the markets are performing.

“There are a lot of other periods in history when the market has felt high,” Stucky said. “But market-timing is a very challenging strategy to implement successfully, whether by retail investors or professional investors.”

However, he said, dollar-cost averaging is not a bad strategy — generally speaking, 401(k) plan account holders are doing just that through their paycheck contributions throughout the year.

Additionally, before putting all your money in, say, stocks, all at once, you may want to be familiar with your risk tolerance. That’s basically a combination of how well you can sleep at night during periods of market volatility and how long until you need the money. Your portfolio construction — i.e., its mix of stocks and bonds — should reflect that risk tolerance, regardless of when you put your money to work.

“From our perspective, we’re looking at 10-year time horizons in the study … and market volatility during that time is going to be a constant, especially with a 100% equity portfolio,” Stucky said. “It’s better if we have expectations going into a strategy than afterwards discover our risk tolerance is very different.”

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New rules for investing in China: Lessons from Beijing’s education crackdown – CNBC

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Chinese ride-hailing company Didi offers cars for guests of the Annual Meeting of the New Champions 2017 (World Economic Forum’s Summer Davos session) on June 27, 2017, in Dalian, Liaoning Province of China.
VCG | Visual China Group | Getty Images

BEIJING — As overseas investors reel from Beijing’s regulatory crackdown, the rapid fallout in an industry like after-school tutoring can be a guide to what went wrong, and where future opportunities lie in China.

Before China cracked down on tutoring schools this summer, major investment firms like SoftBank were pouring billions of dollars into Chinese education companies, many of which were publicly traded in the U.S. or on their way to listing there.

The strategy was one of burning cash to fund exponential user growth, with hopes of profit in the future. For the strategy to work, investors aimed for a “winner takes all” approach that they’d used with other Chinese start-ups such as coffee chain Luckin Coffee and ride-hailing company Didi.

Didi essentially paid Chinese consumers to take cheap rides through its app, beating out Uber to dominate about 90% of the mainland market, and went on to raise more than $4 billion in a New York IPO on June 30.

But it soon became clear that investment strategy might no longer work. Just days after Didi’s IPO, Chinese authorities ordered app stores to remove Didi’s app and began investigations into data security — effectively shutting down the business’s growth prospects in the near term.

It came months after Beijing’s efforts to tackle alleged monopolistic practices by the country’s internet technology giants like Alibaba and Tencent.

By late July, the education sector was clearly Beijing’s next target.

Crackdown on after-school tutoring

In harsher-than-expected measures, regulators ordered tutoring companies in kindergarten to 12th grade academic subjects to restructure as non-profits, cut operating hours and remove foreign investment. Shares of industry leaders such as Tal EducationNew Oriental Education & Technology Group and Gaotu Techedu plunged on that news. They have lost more than 75% each over the last three months.

Chinese tutoring start-ups that investment funds had placed their bets on months before suddenly lost their path to a public listing.

In October 2020, online tutoring start-up Yuanfudao said it raised a total of $2.2 billion from Tencent, Hillhouse Capital, Temasek and many other investors — for a valuation of $15.5 billion.

Two months later, competitor Zuoyebang raised $1.6 billion from investors including SoftBank’s Vision Fund 1, Sequoia China, Tiger Global and Alibaba.

“They were hoping to create another oligopoly like Didi” with market pricing power, said an investor and co-founder of one of the largest U.S.-listed Chinese education companies, according to a CNBC translation of his Mandarin-language interview. He requested anonymity because of the sensitivity of the matter.

However, the education industry already had several major market players, he pointed out, and “it turned out that no business could really beat the other before the crackdown.”

Building a dominant market leader in after-school tutoring was a lucrative prospect. The opportunity was enormous given China’s population of 1.4 billion people and a culture in which parents prize their children’s education.

Early industry players like New Oriental got their start with physically leased locations and in-person classrooms. But the coronavirus pandemic in 2020 accelerated the tutoring industry’s shift online, and the cash-burning fights of China’s internet world was in full play.

Advertising wars

Chinese after-school tutoring companies began to spend heavily last year on advertising to attract new students.

U.S.-listed Gaotu spent more than 50 million yuan ($7.75 million) in one week this past winter for ads on short-video platform Kuaishou, a person familiar with the matter told CNBC.

“In China, Kuaishou is a smaller platform than [ByteDance’s] Douyin/TikTok, so the total spend on traffic by all of K to 12 education companies would be much more than that,” the source said in Mandarin, according to a CNBC translation.

Gaotu did not respond to a request for comment. In its earnings report for the first three months of the year, the company said its selling and marketing expenses of 2.29 billion yuan were three times more than a year ago.

Tal Education disclosed that its spending in the same category surged by 172% from a year ago to 660.5 million yuan for the three months that ended Feb. 28.

Both companies reported a net loss in the quarter, as did another industry player, OneSmart International Education Group, which disclosed a 47% year-on-year surge in selling and marketing expenses to 288.8 million yuan.

OneSmart listed in the U.S. in 2018 in an IPO underwritten by Morgan Stanley, Deutsche Bank and UBS. Later that year, the education company acquired Juren, one of the oldest businesses in China’s tutoring industry.

But the new after-school regulations struck a fatal blow to the 27-year-old company. About a month after the new rules were released, Juren collapsed, just one day before public schools opened on Sept. 1.

OneSmart could be delisted from the New York Stock Exchange since its shares have remained below $1 since July.

Other U.S.-listed Chinese stocks are also struggling. New Oriental did not report a net loss for the quarter ended Feb. 28, but disclosed it spent $156.1 million on selling and marketing in that time, 32% more than a year ago.

The surge in advertising spend to grow student enrollment came as investors piled into the industry, and increased competition sent customer acquisition costs soaring.

The landscape has significantly changed.
Ming Liao
founding partner, Prospect Avenue Capital

With new capital, start-ups Zuoyebang and Yuanfudao, along with Tal Education, reportedly went on to sponsor state broadcaster CCTV’s annual Spring Festival Gala in February. That’s the market equivalent in China of buying a U.S. Super Bowl ad, which costs of about $5.5 million for a 30 second spot.

But regulators were watching. In the months before the harsh crackdown, Chinese authorities fined 15 education companies a total of 36.5 million yuan, primarily for false advertising.

Then in July, harsher regulations on after-school tutoring essentially banned advertising, prohibited public offerings of shares, and investment from foreign capital.

‘Common prosperity’ in China

The new policy marks Beijing’s latest effort to restrict the education industry’s sprawling growth and its burden on parents — a concern for authorities trying to boost births in the face of a rapidly aging population and shrinking workforce.

Investors need to recognize that tackling the population problem, slowing economic growth and tensions with the U.S., have become top concerns for the Chinese government, said Ming Liao, founding partner of Beijing-based Prospect Avenue Capital, which manages $500 million in assets.

“The landscape has significantly changed,” he said, noting that investors now need to consider national policies far more than just industry developments.

In addition to the crackdown on internet companies and after-school tutoring centers, authorities have  ordered online video game companies to restrict children to playing three hours a week.

Speeches by President Xi Jinping have emphasized the goal is “common prosperity,” or moderate wealth for all, rather than some.

Education is just one of the so-called three mountains that Chinese authorities are tackling. The other two are real estate and health care, all areas in which hundreds of millions of people in the country have complained of excessively high costs.

In the last 20 years, corporate profits have largely gone to property developers and companies based on internet platforms, Liao said.

In light of new policy priorities, he said, it’s important for investors to distinguish between internet-based businesses and those developing more tangible kinds of technology like hardware — even if both kinds of companies are loosely referred to as “tech” businesses in English.

With the U.S. now under President Joe Biden and bent on competing with China, Beijing is increasing investing in an ambitious multi-year plan to build up its domestic technology ranging from semiconductors to quantum computing.

The “China market can still offer attractive investment returns for global investors, and the challenge lies in identifying the potential future winners amid China’s rebalancing,” Bank of America Securities analysts wrote in a Sept. 10 report.

They pointed to a shift over the last two decades in the largest Chinese companies by market capitalization — from telecommunications, to banks, to internet stocks. Going forward, they expect greater regulation on internet and property industries, “while advanced manufacturing, technology, and green energy related sectors will be promoted.”

The bank listed a few contenders for “future winners.”

  • Sportswear: Anta
  • Health care: Wuxi Bio
  • Electric vehicles and and EV battery: BYD
  • Lithium in new materials: Ganfeng
  • Renewable energy: Long Yuan
  • Tech hardware: Flat Glass

“Certain industrials sectors that we currently do not cover could also have promising opportunities,” the analysts said.

Future of investing in China

For Chinese after-school tutoring companies that once attracted billions of dollars, they’re now trying to survive by building up courses in non-academic areas like art or adult education. Those in the industry say it’s an uncertain path that has a market only a fraction of what the companies used to operate in.

SoftBank is waiting for clarity on the regulatory front before resuming “active investment in China,” its Chief Executive Masayoshi Son said in an earnings call on Aug. 10.

“We don’t have any doubt about future potential of China … In one year or two years under the new rules and under the new orders, I think things will be much clearer,” Son said, according to a FactSet transcript.

When contacted by CNBC last week about its investment plans for China, Softbank pointed to how it led investment rounds in the last few weeks in Agile Robots, a Chinese-German industrial robotics company, and Ekuaibao, a Beijing-based enterprise reimbursement software company.

“Our commitment to China is unchanged. We continue to invest in this dynamic market and help entrepreneurs drive a wave of innovation,” SoftBank said in a statement.

But when it comes to bets on the education industry, some investors have decided to look elsewhere in Asia.

In June, Bangalore-based online education company Byju became the most valuable start-up in India after raising $350 million from UBS, Zoom founder Eric Yuan, Blackstone and others. Byju is valued at $16.5 billion, according to CB Insights.

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