CANADA - The Caisse de dépôt et placement du Québec has partnered with investor Capital régional et coopératif Desjardins (CRCD) to invest a total of C$600m (US$573m) between the two in small and mid-sized businesses (SMBs).
The pension manager said the agreement's objective was to finance SMBs' projects, such as expansions, research and development, acquisitions and optimization of productivity.
"This agreement supplements the efforts the Caisse is already making to back promising Québec companies. It will allow us to build on our expertise and our distinctive competitive advantages in Québec to generate returns for our clients, the depositors," said Caisse president and chief executive Michael Sabia.
The partnership is based on two different components. In the first one, the two partners agreed to set up a C$200m fund to meet small businesses' financing needs of less than $3m, primarily in the form of subordinated loans. The Caisse and CRCD will be equal partners in this fund.
Desjardins Venture Capital, which manages CRCD and is owned by the Desjardins Group, will be the general partner and allocate the money to the chosen small businesses.
The remaining funds will be aimed at financing solutions for mid-sized companies.
Under this agreement, Desjardins Group and the Caisse will allocate C$300m to these companies over the next three years to meet financing needs of more than C$5m, in the form of conventional five- to seven-year term loans.
In addition, the Caisse and CRCD plan to invest about C$100m in mid-sized companies in the form of equity and quasi-equity.
This week's edition of Professional Pensions is out now.
Ben Gunnee reflects on 2018 and talks about the Fiduciary Management trends to keep an eye on in 2019
Lloyds Banking Group secured 630,000 new pension customers last year, according to its 2018 annual results.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.