Globe & Mail: Fonds de solidarité FTQ Fonds de solidarit FTQ is more than a key player in the investment space – it’s helping to drive a better economy and society
PUBLISHED JUNE 21, 2021
The Fonds de solidarit FTQ helps companies of all sizes grow and innovate, while also supporting tens of thousands of jobs.
As Canadian companies look for ways to innovate and propel their business forward – dealing with the challenges ahead, such as post-pandemic economic recovery, climate change and meeting environmental, social and governance (ESG) goals – investment can help. But for Fonds de solidarit FTQ, a key player in the Canadian investment space, what’s needed goes above and beyond injecting money into the economy.
“We’re a one-stop shop, because we’re doing unsecured and equity instruments,” says Daniel Hinse, vice-president of investments – entertainment and consumer goods, with the Fonds. “We’re complementary to the banks, because by our nature we don’t take any guarantees or any collateral in the companies we invest in.”
Since its creation by the Qubec Federation of Workers following the economic crisis of the early 1980s, the Fonds has worked with the vision of creating a socially responsible development capital fund that would invest in Qubec’s workers and economy. It helps companies of all sizes grow and innovate, but also supports tens of thousands of jobs.
“We have more than 700,000 shareholders – that means close to one out of six workers in Qubec. And over time we’ve been able to invest in more than 3,300 partner companies,” says Alain Denis, senior vice-president of investments with the Fonds. “We’re here for the long term. And I think that allows us to create a big impact across Canada in different ways.”
With net assets of $15.6-billion as at Nov. 30, 2020, the Fonds has injected an average of more than $1-billion per year over the past five years in various financing solutions. Major areas of investing include venture capital, private equity, structuring capital and private funds, which involves investing indirectly in various companies via specialized funds. The Fonds also benefits from a rich regional and local network.
During the pandemic, the Fonds worked with its partner companies to deal with issues related to disrupted supply chains and remote work solutions. Now, a big focus for the future is ESG.
“We want to be investing in a better society. We’re an impact investor and, while we want to generate a reasonable return for our investors, we also want to have a social and environmental impact,” Hinse says. “When we refer to structuring capital, it’s a way for us to invest in something that will bring tangible benefits for the whole community.”
An example of this is its investment in GNR Qubec Capital with Xebec Adsorption Inc., dedicated to developing high-performance organic waste treatment facilities for the production and distribution of renewable natural gas (RNG) in Qubec.
To pursue its mission, the Fonds has more than 50 investment professionals with in-depth expertise in more than 20 industry sectors. Developing sector-specific knowledge was something they initiated before the start of the pandemic, but “with COVID it has accelerated the way we’re able to introduce the right solutions to our partner companies because we understand the workings and challenges of each market,” Hinse says.
For example, it has a pool of funds in life sciences and biotechnology, backed by a team of eight experts in life sciences. These experts analyze opportunities and work with the research and academic community, “so we know where we can invest and make a difference in Canada,” Denis says. “And we’ve been so successful that we’ve been able to attract investors from all around the world and co-invest with funds.”
The Fonds plays an important role in the pan-Canadian venture capital and development capital ecosystem. Among the specialized funds in which it invests are Novacap Investments Inc., iNovia Capital, Lumira Capital Investment Management Inc. and CTI Life Science Fund.
The Fonds has also joined forces with Export Development Canada (EDC) to collaborate in areas of shared priorities – such as financing for innovation, the cleantech sector and export market development – with a goal of collectively helping more businesses compete in the global marketplace. For example, together they’ve made a joint investment in Omnirobotic Inc., a Laval-based robotics automation start-up.
Fonds takes a long-term, holistic approach, and its subject matter experts take the time to get to know their partner companies to come up with tailor-made solutions – from mergers and acquisitions to modernizing equipment and facilities – and provide ongoing support.
Among the sectors in which the Fonds invests, there are many successful companies. To name just a few, think of: Groupe Robert, a leader in the transportation and logistics industry; Groupe Canam Inc., specialized in the design and manufacturing of metal components for the construction industry; Groupe Solmax Inc., the world’s leading geosynthetics manufacturer; or Nuvei Corp., a payment technology provider. Recent cleantech investments in Xebec, Pyrowave Inc., Addnergie Technologies Inc. and GHGSat Inc. are also noteworthy.
“We’re very patient,” Hinse says. “It’s like a blank page. We can adapt to every situation, to every company, to every financial structure. We’re trying to see what’s best for each company.”
For more information, visit www.fondsftq.com.