Canada’s financial sector, including insurance industry giants Great West Life, Sun Life and Manulife, joined Federal Finance Minister Bill Monreau on Thursday to unveil a $1 billion fund for small to medium sized businesses.
Called the Canadian Business Growth Fund, the pot of cash will initially be comprised of $500 million, with the money expected to grow to $1 billion over the next decade.
That growth, however, is contingent on both the “demand for investment and the fund’s performance,” according to a press release.
The fund comes from Bay Street’s biggest competitors but is intended as an independent entity and will have its own board of directors.
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In the press release from the investors and the federal government, it was outlined that the newly created fund would additionally provide mentorship to companies where it was needed.
“The executive team will also be tasked with developing an advisory network to provide mentorship, thereby closing some of the knowledge gaps preventing many mid-sized companies from achieving their full growth potential at home and globally. The aim is to help business founders maintain effective control of their companies to execute on their vision as they grow and expand,” the release said.
“This announcement follows the publication of the second report from the Minister of Finance's Advisory Council for Economic Growth, which identified a gap in the Canadian market for long-term capital and recommended the creation of a private sector-led growth fund for minority equity stakes in companies. One of the goals of the Fund is to ultimately help Canadian companies grow outside of Canada, creating a vibrant, innovative and diversified economy that will spur the creation of jobs and growth for our country.”
More updates from the federal government are expected.
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