Brookfield Asset Management Inc., one of the world’s largest investment firms, is expanding in London after scaling up its UK headcount in recent years and snapping up billions of dollars of assets, according to people familiar with the matter.
The firm has taken on additional space in its Canary Wharf office this year and is planning to add more in the coming months, the people said.
Toronto-based Brookfield co-owns the Canary Wharf Group with the Qatar Investment Authority. Overall, it manages about $60 billion in assets across the UK, including Center Parcs holiday venues and a stake in UK hydroelectric power firm First Hydro. Collectively, around 20,000 people are employed at its sites in the country.
Brookfield’s commitment to London will be a boost to the UK after a summer of political and economic turbulence. The move also underscores London’s status as a financial center six years after the UK voted to leave the European Union. Earlier this year, rival investment firm Blackstone Group Inc announced plans to expand in the UK and move to larger headquarters in London’s upmarket Mayfair district.
Brookfield, which manages more than $750 billion, has increased headcount in London in recent years. Since 2018, the number of employees across its investing and property businesses rose from around 130 to more than 400, one of the people said. The firm did its first UK deal in 2003 when it bought a small stake in The Canary Wharf Group.
Brookfield is also expanding in continental Europe as it seeks to invest billions of dollars in private equity deals, real estate and infrastructure.
In June, Brookfield announced it had raised $15 billion for a global energy transition fund in an initiative spearheaded by former Bank of England chairman Mark Carney, who is now the firm’s vice chair. Brookfield already has agreements to invest about $2.5 billion from the fund, including in renewables projects in Germany and the UK.
The firm has grown its presence in Madrid this year and is planning to open an office in Frankfurt next year, the people said. Through July, Brookfield had invested $12 billion into European deals, a record for the firm, Bloomberg News previously reported.
Canada expected to buck trend of big investment banking layoffs – Reuters
TORONTO, Jan 26 (Reuters) – Some of Canada’s top investment banks plan to maintain staffing levels to meet client expectations for the same level of coverage through the ups and downs of business cycles, head hunters and industry executives said.
U.S. investment banks, including Goldman Sachs (GS.N), began cutting over 3,000 employees on Jan. 11 citing a challenging macroeconomic environment, raising fears Canadian banks may follow suit. Like their global peers, many Canadian investment banks had staffed up during the pandemic only to see dealmaking slow last year.
At Royal Bank of Canada (RY.TO), the country’s biggest lender, for instance, headcount at its capital markets division jumped by 71% over the two years ending Oct. 31, 2022 to 6,887 employees.
But in the meantime Canadian dealmaking fell 39.7% last year to $89.7 billion. That is more than the 36% drop in global deal values to $3.8 trillion following a stellar 2021, according to data from Dealogic.
Yet, Canadian banks have not announced layoffs and some even say they may increase headcount, though dealmaking in the new year is down nearly 50% to $3.2 billion from a year ago, according to Dealogic.
“Right now there is a sense that there isn’t a need for cuts in the system,” Dominique Fortier, partner at recruitment firm Heidrick & Struggles’ Toronto office, told Reuters.
“When there was an upswing in 2021, it happened so quickly that there was no corresponding increase in hiring and so I don’t see that we’ll have the same decrease in terms of headcount coming.”
Toronto Dominion Bank (TD.TO), which last year agreed to buy New York-based boutique investment bank Cowen Inc (COWN.O), expects to continue to grow its global investment banking business as it work towards closing the deal, a spokesperson said.
Desjardins, another Canadian lender, will continue to invest in its growing capital markets division, a spokesperson said.
Bill Vlaad, a Toronto-based recruiter who specializes in the financial services sector, said that while there was some nervousness around the stability of investment banking teams, Canada is unlikely to see U.S.-level redundancies aside from the annual cull of poor performers called “maintenance layoffs.”
“The U.S. is very nimble. They will go in and out of hotspots very quickly. Canada doesn’t have that same luxury and has to stay relatively consistent in coverage,” said Vlaad.
“You have a consistent group of people working…and they don’t fluctuate all that much year to year, decade to decade.”
But another down year for dealmaking could see bonuses taking a hit.
RBC, which was ranked No. 2 in Canada M&A, equity capital markets and debt capital markets last year according to Dealogic, has no layoff plans for investment banking in Canada, a source with knowledge of the matter said.
Spokespeople for JP Morgan, which topped the M&A league table last year, Scotiabank (BNS.TO) and Canadian Imperial Bank of Commerce (CM.TO) declined to comment. BMO did not respond to requests for comment.
Headhunters and lawyers say it’s less expensive to lay off bankers in the United States compared to Canada.
Howard Levitt, senior partner at employment law firm Levitt Sheikh, said Canadian investment banking employees would be entitled to somewhere between four and 27 months severance with full remuneration depending on their status, re-employability, age and length of service.
Editing by Denny Thomas and Deepa Babington
Our Standards: The Thomson Reuters Trust Principles.
Weaker Orders, Investment Underscore Ailing US Manufacturing – BNN Bloomberg
(Bloomberg) — US manufacturing showed more signs this week of succumbing to the Federal Reserve’s aggressive interest-rate hikes that are taking a bigger bite out of demand and risk upending the economic expansion.
The government’s first estimate of gross domestic product for the fourth quarter and a report on December factory orders for durable goods pointed to sizable downshifts in both spending on business equipment and bookings for core capital goods.
The durable goods report Thursday showed orders for nondefense capital goods excluding aircraft — a proxy for business investment — dropped 0.2% in December after no change a month earlier. Over the fourth quarter, bookings for these core capital goods posted the weakest annualized gain since 2020. Shipments, an input for GDP, decreased for the third time in four months.
“Taken in tandem with the output data where industrial production has declined in six of the past eight months, it is increasingly evident that the manufacturing recession is well underway,” Wells Fargo & Co. economists Tim Quinlan and Shannon Seery said in a note to clients.
Also on Thursday, the GDP report showed outlays for business equipment dropped an annualized 3.7%, the largest slide since the immediate aftermath of the pandemic. That decline was part of a broader demand slowdown, which included a smaller-than-forecast advance in personal spending.
While GDP growth beat expectations, details of the report that offer a clearer picture of domestic demand were decidedly weak. Inflation-adjusted final sales to private domestic purchasers, which strip out inventories and net exports while excluding government spending, rose at a paltry 0.2% rate — also the weakest since the second quarter of 2020.
Last month’s retreat in core capital goods orders indicates manufacturing output, which already registered sharp declines in the final two months of 2022, may struggle to gain traction this quarter.
Read more: Weak US Retail Sales, Factory Data Heighten Recession Concerns
The slump in housing is also spilling over into producers of non-durable goods. Shares of Sherwin-Williams Co. tumbled this week after the paintmaker pointed to pressures stemming from a weak residential real estate market and inflation.
“We currently see a very challenging demand environment in 2023 and visibility beyond our first half is limited,” Chief Executive Officer John Morikis said on a Jan. 26 earnings call. “The Fed has also been quite clear about its intention to slow down demand in its effort to tame inflation.”
An accumulation of inventories only adds to the headwinds. Inventory building accounted for about half of the 2.9% annualized increase in fourth-quarter GDP. For the year as a whole, inventories grew $123.3 billion, the most since 2015.
With demand moderating, there’s less incentive to ramp up orders or production as companies make greater efforts to sell from existing stock.
In addition to the aforementioned data, the latest surveys of manufacturers show sustained weakness. Measures of orders at factories in four regional Fed surveys have all indicated multiple months of contraction.
All surveys released so far for this month are consistent with an overall contraction in activity that extends back through most of the second half of 2022.
Next week, the Institute for Supply Management will issue its January manufacturing survey and economists project a third-straight month of shrinking activity.
©2023 Bloomberg L.P.
Opinion: Now is the time to invest in post-secondary education – Edmonton Journal
If the last few years have taught us anything, it’s that the world — and the global economy — can go through seismic shifts in a relatively short amount of time. Since I began my term as president of the University of Alberta in 2020, we have witnessed a pandemic and a corresponding global recession, followed by an economic rebound. We have turned the corner, perhaps more quickly than any of us could have imagined. Alberta’s economic outlook is now positive, with ATB Financial predicting 2.8-per-cent real GDP growth in 2023.
To ensure a prosperous future, we must maintain an Alberta that attracts and retains talented people and investments. With a strong post-secondary learning system, Albertans can get the high-quality training and skills they need — right here at home — to meet the labour market needs of tomorrow’s economy.
The province is facing a continuously tight labour market. The Government of Canada’s October Labour Market Bulletin for Alberta warned: “While the province has been experiencing an economic windfall recently, labour shortages in key sectors, especially the health-care sector, continue to threaten growth.” By 2030, experts predict an acute need for more engineering, health care, science and business professionals.
We are fortunate that our province is home to a young and growing population. The number of Alberta high school graduates is projected to grow by 20 per cent in the next five years. To accommodate this demographic boon, we urgently need to grow Alberta’s post-secondary sector so that these high school graduates will have the opportunities they need to thrive in Alberta’s growing economy.
We are tackling this challenge head-on at the University of Alberta, where we are home to 25 per cent of Alberta’s post-secondary students. In partnership with the province, we’ve been actively investing in enrolment growth to support these areas of greatest demand. We now have record-high enrolment, with over 44,000 students, including over 1,600 Indigenous students.
Last year, the U of A received $48.3 million from the provincial government’s Alberta at Work program to support enrolment growth. This investment is paying dividends, enabling us to grow by another 2,600 students, increasing the number of young Albertans who can study at home at one of the world’s top 100 universities. But we’re not going to stop there. We’re aiming to increase our enrolment to over 50,000 students by 2026.
With Alberta’s upcoming 2023-23 budget on the horizon, we have proposed to the Government of Alberta an ambitious plan to grow by another 3,500 students, targeted to the areas of greatest employer and student demand. With this expansion, we can reach our goal of over 50,000 students by 2026. We are keen to play our part in continuing to meet the needs of tomorrow’s labour market, ensuring a bright future for the province.
University of Alberta graduates are critical drivers of economic growth and prosperity. Over the last decade, 84 per cent of our graduates have stayed in Alberta, helping to grow and diversify the economy. Ninety-four per cent of our graduates are employed two years after graduation, with 97 per cent of graduates working in a job related to their field of study.
When the U of A grows, everyone in Alberta benefits.
Bill Flanagan is president and vice-chancellor of the University of Alberta.
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Trump’s Evolution on Truth Social: More QAnon, More Extremes – The New York Times
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