The tech capital markets in Canada are lacking in interest. One portfolio advisor is looking to change this reality with a new investment company.
From the perspective of Colin Fisher, president and portfolio manager with wealth management firm Stableview Asset Management, the Canadian markets are missing some kind of leading capital market representative.
That’s where Garrison Creek Capital will come into play, according to Fisher. The investor plans for this firm to use the methods used by private equity when it comes to investment in the Canadian tech market.
Garrison Creek Capital will make a debut in the open market in the near future, according to the portfolio manager.
Fisher talked in-depth with the Investing News Network (INN) about the challenges currently seen in the investment arena for Canadian tech firms and what he hopes his new company will do about it.
The following interview has been edited for clarity and brevity. Continue reading for more of what Fisher told INN.
INN: When it comes to this private approach in a public setting can you talk more about what you hope the play will look like for an investor looking for tech exposure and development of smaller tech companies in Canada?
Colin Fisher: They’ll be commercial typically, they’ll be earlier stage and smaller companies.
The check sizes coming out of the US are much bigger … we’re never going to eliminate the US buying our companies, but I think we can get one or two more turns of capital into these companies.
INN: Why do you see this gap in the investment when it comes to the relationship between Canadian investors and the tech sector in the country?
CF: There’s a multitude of reasons, but I think the most important to me is that Canada is filled with generalists, and a lot of our money is generalist money. Our portfolio managers are generalists, our investment advisors are generalists, our family offices are generalists.
We’ve developed develop a very strong ecosystem of smart companies and leaders in the space but they’re getting primarily their funding from the US, so we’re losing that talent, and we’re losing the economic to the south of the border.
I think it’s just that we don’t have anyone who’s really taking up the mantle and acting as a leader in the space and driving these companies forward. Part of it is that a lot of the money is passive money in Canada — we have ETFs going through the roof, we have mutual funds, which can’t take a private equity approach.
We want to take a private equity approach, take more of a strategic approach with these companies and help provide the guidance from an operational point of view for them so that they get the expertise from the CEOs that we have on our board. We can help find them and migrate talent towards them and help them with the strategies and ensure that they’re taking the right approach when it comes to going to market, managing growth and all of the other fun stuff.
We just think that there’s not a lot of operational expertise around the capital that we have in Canada.
INN: So you’re hoping to offer more competition to the types of capital that’s offered to Canadian companies from the US markets?
CF: I’m not saying “Don’t get money from the US.” I think we can get more of our own Canadian money in at earlier stages and help increase the probability of success for these companies.
The US money is always going to be there; we’re not going to be able to supplant the multiple billions that keep coming across the border. What we can do, though, is augment the returns inside the Canadian space and be more meaningful participants in helping shepherd the capital into the Canadian tech space.
INN: Can you share more details of the board members providing this expertise you have mentioned?
CF: These are CEOs that have built multiple billion-dollar companies in the past. I don’t necessarily want to get into them just yet until everything locks down.
These are people who’ve done a lot of heavy lifting, have built billion-dollar-plus companies before, and it’s all in the business to business (B2B) space.
B2B is the primary type of tech that Canada does very, very well at. We’re not typically a consumer base or a consumer-facing technology group of companies.
INN: So in this case would you say that for the new firm the focus in investments will be to target more of these B2B tech companies?
CF: One hundred percent. One hundred percent, yeah.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.