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Vancouver investment fund offers retail investors a piece of the plant protein boom – The Logic

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VANCOUVER — A relatively new investment fund that bets on what it believes is the future of food will see its shares start trading on the Canadian Securities Exchange (CSE) on Tuesday. Eat Beyond Global Holdings believes the move that made its shares available in the secondary market is a first in Canada: giving retail investors the opportunity to get in on the ground floor of the much-hyped plant-based protein sector.

The Vancouver-based fund, with former grocery retail bigwigs leading its investment decisions, expects European and American listings to follow over the next several weeks. Its partners will watch its share price closely, with fingers crossed in hopes it rises. Strong interest would prompt a new offering to raise more cash, and see Eat Beyond become a more significant player in the alternative-protein space. The group wants deeper pockets with tens of millions of dollars to spend, rather than the roughly $966,000 left in its coffers, as it looks to seize on the industry’s popularity.

Talking Point

A Vancouver-based investment fund that bets on the future of food made its shares available to retail investors Tuesday with the start of trading on the Canadian Securities Exchange. Eat Beyond Global Holdings invests in companies in Canada and around the world in companies involved in plant-based proteins, fermented foods, food technology, and cultured and cellular agriculture. It will watch the share price closely and plans to offer more shares in the next four or so months to raise more capital for future investments in the much-hyped industry.

Plant-based and alternative protein has been the darling of the food world in recent years as consumer appetite grows for the purported health, environmental and animal-welfare benefits of a shift away from meat. Silicon Valley startups have popped up aiming to make vegan and vegetarian food look and taste better, or to crack the cellular agriculture puzzle of how to grow meat and other animal products from cells, skipping the factory-farming step. 

The sector has also caught the eye of some of the world’s most influential private investors. Venture capital activity in bioengineered foods—which includes plant-based meat, dairy and seafood companies, as well as those working on cultivated-food and fermented protein—saw US$1 billion invested through 35 deals in the third quarter, according to PitchBook. That marked its highest quarterly deal value in the past decade. So far this year, the sector has seen US$2.6 billion across 101 deals. In the quarter, Impossible Foods closed a US$200-million funding round, bringing its total funding to more than US$1.5 billion from investors such as Li Ka-shing and his Horizon Ventures, as well as a who’s who of Hollywood, including Kal Penn, Mindy Kaling and Trevor Noah. California-based Beyond Meat, one of the most well-known names in the plant-protein space, went public in May 2019 at US$25 per share. It’s traded at over US$100 for the past several months.

“Part of the problem is that your average investor can’t necessarily participate in some of these companies,” said Patrick Morris, Eat Beyond’s CEO and director, who describes himself as a flexitarian en route to vegetarianism. (It appears to be a risk of working at the company. Another director became vegan about 12 months ago.) Eat Beyond makes many of its investments in companies before they go public, at a stage when the common investor lacks access. But by trading in Eat Beyond’s shares, Morris said, “they’re participating, just through us.”

Eat Beyond has so far raised money privately to fund its activity. Its latest private placement, closed August 12, raised nearly $1.7 million with almost 3.4 million units at $0.50 each. It looks to invest the funds in companies involved in plant-based proteins, fermented foods and food technology, as well as cultured and cellular agriculture. 

So far, it has put $800,000 total into four Canadian companies, and about $552,000 into three others. Eat Beyond bought nearly 6.2 million shares of Toronto-based GreenSpace Brands for $400,000; $250,000 into Edmonton-based Nabati Foods for a roughly 14 per cent stake; and $100,000 for some 714,000 shares of Vancouver-based Good Natured Products. It made a smaller investment of $50,000 for 200,000 shares, at $0.25 per share, of The Very Good Food Company in B.C. That one has already paid off in dividends after the company went public, listing its shares on the Canadian Securities Exchange in June. They’ve traded at a high of $5.70 since then, with their lowest point of $0.46—still well above the buy-in price for Eat Beyond. “We sold our initial investment for a significant profit,” said Morris, declining to provide the percentage gain, and noting the company still holds a position in Very.

While they’re not just considering Canadian companies, there’s a definite advantage to being located in the country, said Morris.

That advantage is one Bill Greuel sees and is working to strengthen. “A large, abundant supply of sustainably produced plant protein, I would say, is the key driver,” said the CEO of Protein Industries Canada, one of Canada’s five superclusters. Homegrown companies in the space benefit from access to an abundance of raw materials. Canada produces, on average, more than 10 million metric tons of plant protein a year, he said, providing an alternative to soy protein. “We’re offering something a little bit different,” he said. Additionally, the supercluster and its 250 members focus on growing the sector, and can provide connections between “this emerging community of organizations and companies and academic institutions and government labs.”

Eat Beyond also committed funds to four companies beyond Canada’s borders. That includes $200,000 into U.S.-based Eat Just; $200,200 into TurtleTree Labs; and $152,000 into SingCell, both out of Singapore––the firm is now left with $965,850 of unallocated working capital and reserve for future investments, according to financial documents. Eat Beyond has several possibilities in the queue, said Morris, and expects to make another two or three moves in the next 60 days. That will chip away at its reserve, which is already well short of its stated goals. Eat Beyond had initially planned to take a minimum five per cent stake in 10 to 15 investments of between $1 million and $10 million over 48 months. It later revised that to seven to 10 investments of between $50,000 to $1 million. The countdown begins at the start of trading on the CSE.

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“We found that smaller investments in companies that are soon to be public/IPO were giving us excellent returns so we broadened the scope,” wrote Morris in an email to The Logic explaining the change. “Again, each investment is reviewed on a case by case basis as each is offered with different terms so we need to be nimble as the segment evolves.”

The company believes “there will definitely be another offering,” Morris said in the interview. That’s one way it plans to raise funds for future investments.He anticipates a new offering in the next four months. “Our goal, in the next 12 months, is to be more in the $50-million range.”

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Investing in a sustainable future – Kaleido introduces its Sustainable Investment Policy – Canada NewsWire

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QUEBEC CITY, Dec. 1, 2020 /CNW Telbec/ – Kaleido, the pioneer in education savings, is introducing a new responsible and sustainable investment strategy this December with its new Sustainable Investment Policy. One financial action at a time, Kaleido is working to build a brighter future.

“Sustainable investment means more than just investing in environmentally responsible firms,” says Isabelle Grenier, President and CEO of Kaleido. “We’re proud to say that 100% of our asset managers consider environmental, social, and governance factors—ESG criteria—when choosing what securities to invest in. We have an enormous responsibility as asset managers because every choice counts!”

ESG investing prioritizes organizations that create lasting value while making positive contributions on important social and environmental issues. It’s a philosophy that goes hand-in-hand with Kaleido’s work in education savings. After all, our goal is to build value over the years so our families can use their investments for their children’s postsecondary studies.

Kaleido also advocates for best practices in sustainable investment along with other national leaders in the field as an associate member of Canada’s Responsible Investment Association (RIA).

“We are committed to staying ahead of the curve. Our portfolio managers are already taking positions in favor of workplace safety and greenhouse gas reduction, for example. Our Sustainable Investment Policy is one more step towards our goal to create a brighter future for our youth,” says Grenier.

As always, Kaleido is driven by the conviction that all children can achieve their full potential when given the means. To give future generations the same chance, it is both logical and vital to invest in companies and initiatives that are working toward that goal.

 About Kaleido

Kaleido helps families in Quebec and New Brunswick give their children a leg up on future success. Every day more than 100 employees and as many representatives create brighter opportunities for youth through education savings, parent support, and insurance solutions.

Kaleido has been a pioneer in education savings since 1964. Over the years the organization has issued $993 million in educational assistance payments and savings refunds to benefit more than 227,000 young people. Kaleido has $1.7 billion in assets under management.

To learn more, visit kaleido.ca/en and follow us on social media.

SOURCE Kaleido Growth Inc.

For further information: Patrick Pedneault, Media Relations, [email protected], 418-651-8977, ext. 2312

Related Links

https://www.kaleido.ca/

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BMO to exit oil and gas investment banking in the US – BNN

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Bank of Montreal is winding down its U.S. oil and gas investment banking business and will focus on assets in Canada going forward, becoming the latest financial institution to cut ties with America’s beleaguered shale industry.

BMO said it has made “the financial decision for an orderly wind-down of our non-Canadian investment and corporate banking energy business.” Going forward, the company said by email, its capital markets energy business will be focused on Canada.

The company is eliminating about 50 positions in its investment banking group as part of the exit that was announced to staff on Monday, according to a person with direct knowledge of the situation who asked not to be identified because the information isn’t public. A handful of corporate bankers will manage BMO’s U.S. oil and gas loan book, the person said.

BMO is the latest bank to halt investment banking tied to U.S. oil and gas explorers, which even before the pandemic were facing pressure after years of generating meager returns. The move didn’t appear to be related to ESG concerns plaguing fossil fuel companies. America’s shale industry has been swept up in a wave of consolidation in recent months as the pandemic slashes oil demand, drags down prices and forces low-premium mergers. That follows years of lackadaisical M&A activity in the oil patch.

On Tuesday, BMO reported gross impaired loans in its U.S. oil and gas portfolio of $457 million at the end of its fiscal fourth quarter, compared with only $93 million for the industry in Canada and other countries.

BMO’s U.S. oil and gas loan book was about  $7 billion as of July 31, making up half of its overall oil and gas loans, according to a company presentation.

–With assistance from Derek Decloet.

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Scotia's top 10 investment themes for 2021 include 'the hunt for yield intensifies' – The Globe and Mail

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Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

The equity strategy team led by Hugo Ste-Marie at Scotia Capital published 10 Themes for 2021 – Unleashing Excess Cash Tuesday morning.

The top themes are,

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“1. Piles of stacked cash could soon turn into hot money. 2. Synchronized downturn, synchronized upturn 3. The road to US$200 EPS 4. Income scarcity: The hunt for yield intensifies 5. Bond yields: The great normalization 6. Go Global 7. Small could be big in 2021 8. Hard assets shining, CAD roaring 9. Sector rotation favors cyclicals 10. No Value left behind [and]11. Bonus – Capital markets spring back to life”

Here’s an excerpt from the section on yield scarcity,

“Interest rates on cash deposits and government bond yields should remain quite anemic next year. As traditional sources of income can’t fulfill their role anymore, the hunt for yield will likely intensify and investors will have to look for alternatives. Equities appear an obvious choice. After a challenging year, dividend growth should resume in 2021 on the back of improving profitability trends. Moreover, dividend yields have rarely been this attractive versus government bonds in over half a century”’

” @SBarlow_ROB Scotia: “10 Themes for 2021 – Unleashing Excess Cash” – (research excerpt) Twitter

***

Morgan Stanley has updated its “Fresh Money Buy List” of top U.S. stocks picks, removing S&P Global Inc. because of “regulatory and/or policy restrictions”.

The remaining list consists of Ally Financial, Citizens Financial Group Inc., Walt Disney Co., Humana Inc., Johnson & Johnson, Linde PLC, Mastercard Inc., PVH Corp., and T-Mobile U.S. Inc.

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“@SBarlow_ROB MS drops S&P Global from its Fresh Money Buy List of U.S. picks” – (table, including performance) Twitter

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Also from Morgan Stanley, the technology and telecom research team led by Katy Huberty published a report outlining the bright outlook for 5G-related stocks and provided a list of stock ideas (my emphasis),

“We are buyers of stocks exposed to stronger than expected consumer 5G demand. Consumer smartphone purchase intentions are the strongest in recent history according to our AlphaWise survey of nearly 3,500 consumers in the US and China. The main driver is demand for 5G, which is now the primary reason consumers are upgrading in the US and China – a comparatively bigger catalyst than any other recent technology upgrade and a more bullish signal relative to investors’ more cautious stance. We highlight key takeaways across our global technology and telco services teams and recommend owning a group of stocks that we view best positioned for 5G infrastructure investment and smartphone demand upside.”

The top 10 5G-related stock ideas are Apple Inc., T-Mobile US Inc., Qualcomm Inc., Delta Electronics Inc., Samsung Electronics Co Ltd., Sunny Optical Technology Company Ltd., China Mobile Ltd., Taiwan Semiconductor Manufacturing Company Ltd., Murata Manufacturing Co. Ltd. and Ericsson.

“@SBarlow_ROB MS: Top 10 5G-related stock picks” – (table) Twitter

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New column from me: “What investors can learn from the top performing U.S. value stocks” – Inside the Market

Diversion: The Ringer’s panel rewatches and discusses the 1980s movie Wall Street – The Ringer (podcast)

Tweet of the Day:

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