Jacoline B. Loewen, Disruptive Technology in Fintech
From TechFest happening in Vancouver to the Waterloo Innovation Summit and Elevate Toronto, it was the week of innovation and entrepreneurs.
During the same week, I got an amazing phone call from Switzerland. Our UBS Global Fintech Challenge was done. UBS was now releasing the details about the finalists selected to go to New York.
The eleven finalist companies will receive mentoring about their technology and brain storm about how they could work with our UBS information technology team members.
The finalists will spend several days in New York And hang out with the UBS key players and decision makers for UBS Bank around the world. This is worth more than the prize money for both the startups but also for UBS. It is an amazing way to engage with the best, most disruptive and the most relevant innovative fintech companies from around the world.
The 11 finalists will then be helped to prep and then to present their Pitch Deck to the judges. One winner will be selected to get the investment capital award. Probably the mentoring and networking is of far greater value but someone has to won the podium. This is all coming up in November, 2017.
I must say, I was stunned to hear the numbers behind the competition and how much the Canadian FinTech is hitting above its weight. For your interest, here is a quick numbers break down:
1,000 applicants across the globe.
125 were looked at closely
Out of the 11 finalists in the Americas going to New York - a whopping 5 are Canadian.
2 of these Fintech companies are female founded and led.
It would be amazing if a Canadian won. I will keep you posted!
The Billionaire, Ray Dalio, one of the world's largest and best-performing hedge funds has published his autobiography which I recommend. A true entrepreneurial success story, Dalio started his company in a tiny apartment. He was a self-described poor student. Forty years after starting his company, Dalio decided to share his success secrets in his new book,Principles.
Ray says the most important chapter that reveals the number one roadblock to success that is so engrained in the human experience, and in our DNA, it's difficult to overcome. But those who recognize it and take steps to knock down the barrier will be in a much stronger position to get what they want out of life.
Dalio's advice: Be radically open-minded
Good decisions aren't necessarily the ones that stroke your ego. A good decision is what's best for you and your company. To make good decisions, argues Dalio, a person must have the ability to explore different points of view and different possibilities, regardless of whether it hurts your ego.
Ask any of your friends or any entrepreneur if he or she is open-minded, and most--if not all--will say they are. But are they? Are you? According to Dalio, here are some cues that will tell if you are truly open-minded.
Close-minded people don't want their ideas challenged; open-minded people are not angry when someone disagrees.
Close-minded people are more likely to make statements than ask questions; open-minded people genuinely believe they could be wrong.
Close-minded people focus much more on being understood than on understanding others; open-minded people always feel compelled to see things through others' eyes.
Close-minded people lack a deep sense of humility; open-minded people approach everything with a deep-seated fear that they may be wrong.
Dalio believes that recognizing these traits in yourself is just the first step. The second step is recognizing them in others. Once you do, "surround yourself with the open-minded ones," he says.
Imagine a world where everyone was perfectly honest and trustworthy when it came to money. This is where banks arose to help trusted intermediaries to able to protect and transact with money. Now, imagine a world with a single, universal, absolutely trustworthy and completely indestructible financial ledger. This is where blockchain is arising. It is to create a simplified, single ledger for transfer of value.
Jacoline Loewen at the Blockchain and Crypto-Currency Event, 2017
With these points in mind, I put together an event discussing these themes and how blockchain is gaining in achieving this lofty vision. Crypto-currencies and blockchain technologies are attracting tremendous interest from new and traditional participants across all sectors, and banks are at the forefront of understanding the potential applications of these technologies - which will change how banks operate at an organizational level, not just at a technology level. Efforts like UBS's Blockchain and Innovation Lab in London, UK will drive innovation through unique partnerships with fintechs and other large banks as blockchain technologies are better understood by regulators and clients and industry standards emerge. In 2015, UBS started a pathfinding journey to explore, harness and share the potential of blockchain. As a leading financial organization, it is our duty to understand the technology and its implications, to share the knowledge and benefits with clients, the financial industry and the wider society, and become ready for blockchain in production in 2018.Thank you to our expert speaker, Peter Stephens, Head of UBS Blockchain and Innovation Lab in London, UK. A special thank you to Andre Perey, Blake, Cassels & Graydon LLP (Blakes), who hosted the fireside chat with Peter. Andre is also a director on the board of UBS Bank (Canada).If you would like more information about the Exploring Blockchain and Crypto-Currencies event held by UBS Bank (Canada) in August, 2017, or for UBS reports on blockchain and cryptocurrencies, please contact me for details.
Jacoline Loewen: 416-332-7012 You can follow me on Twitter @jacolineloewen
I was pleased to be invited to serve for a third term on the board of directors of The Atmospheric Fund.
Being on the Investment Committee means real input into private equity investing and sustainable investing.
TAF is governed by a 12-member board. Five of these members are City Councillors and seven are citizen members appointed through the City of Toronto’s public appointments process. TAF has been fortunate to have attracted a wide range of experience and expertise to our board, including investment specialists, energy experts and community engagement professionals. The board meets five times a year and board meetings are open to the public (but may include in-camera sessions).
Investment Committee
The Investment Committee oversees both management of TAF’s endowment and mandate-related investments (loans and equity investments in enterprises that can deliver emission reductions). The committee members have a wealth of investment and legal expertise and provide recommendations to the TAF board on all investment decisions.
Members:
Rob A. Roberti (Chair), Principal at Verde Finance
John Campbell, City Councillor
Bill Crossland, President and CEO at Thermal Energy International Inc.
Jason Kotler, Entrepreneur
Hyewon Kong, Associate Portfolio Manager at AGF Investments Inc.
Matthew Z. Leibowitz, Partner at Plazacorp Ventures
Jacoline Loewen, Director at UBS Bank (Canada) Wealth Management
Graham McBride, Independent Investor and Strategist
Bill Tapscott, Managing Director at Era2 Productions Inc.
Terry Vaughan, Senior Consultant at Prime Quadrant
The committee’s responsibilities include:
Selecting the investment manager(s) and any other agents or advisors needed to prudently manage the endowment
Formulating and amending when necessary the Statement of Investment Objectives and Principles (SIOP), with consideration to TAF’s mandate and purpose of advancing solutions to climate change and air pollution, and reviewing the SIOP at least once per year
Preparing and maintaining a Prohibited Securities List of companies whose securities cannot be held in the portfolio in keeping with the mandate and beliefs expressed in the SIOP
Monitoring the investment manager(s) and any other agents or advisors with respect to investment performance and compliance with the SIOP
Reviewing and advising on impact/direct investments and providing recommendations on those investments to the board
Providing quarterly reports to the board on the performance of the endowment and any other aspects of asset management, which the Investment Committee deems appropriate or as requested by the board
We all know that automating a monthly deposit to our nest egg bank account is a proven method to build wealth. It's fairly painless as you do not notice the withdrawals and you rapidly adjust your lifestyle. Pretty quickly, your wealth does grow, particularly if you choose lower risk investments with a decent interest rate?
How about something more specific?
I like the table below that shows monthly savings rate with interest earned. It is over a 25 year period which my not serve your needs but will be good to show your adult children to inspire them to at least start with the automatic monthly savings to their TFSA.
The UBS Bank (Canada) team showed their true grit at the Toronto Triathlon Festival 2017. It was a great experience to be with my team on the weekend and to see the competitive spirit of all of them.
Thank you for the great day
For "complete" retirement planning, there is more required than the usual "meat and potatoes" approach of financial preparation. Recent research shows that the retirement planning needs are changing.
Pre-retirees report that they are more anxious about the emotional adjustment to retirement than they are about financial security. Once over that barrier, the retirees worry about health and long-term care, and not so much about having income to sustain their lifestyle.
Our findings confirm that the wealthy investors are focused on:
1) Liquidity: Wealthy pre-retirees want to reach a certain asset or dollar level before they retire. In contrast, age is the retirement trigger for pre-retirees with fewer assets.
2) Longevity: More than half of wealthy retirees feel unprepared for health issues and long-term care. This is an opportunity for Financial Advisors to add far more value to their clients.
3) Legacy: 51% of retirees plan to leave assets to heirs and charity. As a result, many maintain and even increase equity holdings after retirement. Retirees in their eighties, for example, have equity levels similar to investors in their fifties.
Submit your innovation and join our launch event in Toronto
Please
join us for our breakfast and briefing session about our UBS global innovation challenge for
FinTech start-ups, with up to US$250,000 in prizes and support for technologies
that best address our four challenges.
The UBS Future of Finance Challenge 2017 is
open to start-ups and established, growing companies that think they can
change the way finance works and how banks meet their clients' needs.
To find out more: https://innovate.ubs.com/ Complete a submission form to enter our global innovation competition for FinTech start-ups, with up to US$250,000 in prizes and support for technologies that best address our four challenges.
Healthy Start, Healthy Future held their fourth annual Celebrity Tournament, this year featuring a special celebrity skills challenge with some of your favourite stars.
The Celebrity Tournament is in support of the Life with a Baby Program to support parents and prevent Postpartum Mood Disorders. Support focused on the mental and emotional health of mothers, and mothers of preterm infants who spend time in the NICU to prevent postpartum depression.
It was a terrific golf event that featured appearances by a wide range of celebrities who believe in our cause.
Our 4th annual golf tournament took place on Monday July 10th 2017 at The Thornhill Club..
Jacoline Loewen and golf with Healthy Start
Healthy Start, Healthy Future manages the Life with a Baby Program, Canada’s largest peer‐to‐peer network with over 10,000 members. This program is geared toward providing a Healthy Start for parents and children from day one. Members are primarily mothers aged 25‐40 with at least one child. Proceeds from the event will benefit Life with a Baby and other programs that support new and expecting parents to ease the transition to parenthood and prevent the debilitating effects of Post‐Partum Depression and of Perinatal Mood Disorders.
For the fourth year in a row, CFL Hall of Famer Damon Allen returned as host for the event along with Todd Keirstead, golf professional, founder of Golf With Attitude and Bring Back the Game - which focuses on helping everyone enjoy golf regardless of age or (dis)ability.
Other celebrities in attendance include:
Murray Foster – Songwriter, environmentalist, filmmaker, and musician with Moxy Früvous, Great Big Sea, and the Cocksure Lads.
Bryan Muir - Retired NHL defenceman and former Stanley Cup Champion with the Colorado Avalanche. Sherman Hamilton – Former Basketball Player for Team Canada and sports analyst on Sportsnet & NBA TV.
Paul Jones – Raptors TV host and Raptors play-by-play announcer for radio broadcasts.
Sherry Middaugh – Five-time Ontario and one-time Saskatchewan curling champion, multi-time bronze medalist at the Scotties Tournament of hearts.
Rob Hitchcock – Former linebacker and safety for the Hamilton Tiger Cats and the Edmonton Eskimos of the CFL.
Gregg T. Butler – Former CFL defensive back and football coach at the CFL and CIS levels.
Bob Turcotte – Retired curler, winner of 3 Canadian senior curling championships, multiple provincial titles, and a world championship.
Roy Weigand – Retired curler, winner of 3 Canadian senior curling championships, multiple provincial titles, and winner of one world championship.
Jason Portuondo – Veteran Canadian TV/Radio personality and sportscaster for TSN, CTV, Sportsnet, G98.7FM, and 680 News.
Ian Leggatt – Retired professional golfer, winner of one PGA Tour event and one Nationwide Tour event. Ian appears as a golf analyst on Sportsnet and is currently the Director of Golf at The Summit Golf and Country Club.
Dennis Maruk – A retired Ukrainian-Canadian professional ice hockey player. He played in the National Hockey League from 1975 to 1989, scoring a career high 60 goals for the Washington Capitals in 1981–82.
Dwayne De Rosario - A retired Canadian professional soccer player, who played as a forward or as an attacking midfielder. A four-time MLS Cup champion, he also won the 2011 MLS Most Valuable Player award.
Anson Henry - A Canadian sprinter who specializes in the 100 metres. At the 2003 Pan American Games he won the bronze medal in the 100 metres. Also competed at the 2008 Olympic Games.
Glenn Howard - Canadian curler from Tiny, Ontario. One of the most decorated curlers of all time; He has won 4 world championships, 4 Briers and 15 Ontario provincial championships.
Elliot Price - A Canadian sportscaster and currently the host of the morning show of CJCL 590 in Toronto.
The huge transfer of small business wealth is the last big direct impact that the baby boomers are going to have on the economy during their working lives, said Glenn Huber, president of Calgary-based private equity firm Chrysalis Acquisition Partners Inc. After that, boomers’ big influence will be mainly on the travel industry, retirement homes, and ultimately, the funeral business.
Jacoline Loewen, director of business development
Mr. Huber’s company has set up a fund, the Chrysalis Acquisition Fund 1, to buy up small and medium-sized businesses in Western Canada that are looking for an alternative to selling to heirs, employees, or individual buyers. In many cases the fund will partner with a small firm’s remaining management, providing the capital to help buy out the founder.
Jacoline Loewen, director of business development at UBS Bank (Canada)
and an expert on small business succession, said the recession delayed the start of the boomer transition because many entrepreneurs did not want to sell out while the economy was weak. Now, she said, many are ready to think about it, although few have done the necessary preparation. That has created an even bigger bubble of small companies ready to change hands.
Ideally, business owners should begin thinking about transition five to 10 years before they leave, she said, and even before they hit their 50th birthday. In preparation, they should hire advisers, or at least set up an expert advisory board that can help guide them and provide contacts. But baby boomers tend to overestimate their health and stamina, and “stay on for far too long,” Ms. Loewen said.
The first choice for many small business owners is to have their children take over, Ms. Loewen said, although often the kids just aren’t interested, having seen the toll that running an enterprise can take. When the children are keen to take over, she said, a proper valuation of the business needs to be performed, and the next generation should be prepared to buy in – even competing with external buyers if necessary.
At Alps Welding, Mr. Dussin and his parents set up a structure where he received shares that will gain value as the business grows. Eventually, he can buy out his parents’ holding.
More importantly, Mr. Dussin said, was the gradual process of shifting managerial control from one generation to the next. He came in as vice-president 11 years ago, then took on more responsibility over time, becoming president about five years ago.
Mr. Dussin’s father is still involved, and that is a key aspect of baby-boomer business succession if it is to proceed smoothly. “This business is my father’s life … He doesn’t have a lot of interests outside of work. It is not like he has been waiting to play golf five times a week,” Mr. Dussin said.
PricewaterhouseCoopers, in a recent report, predicts a “highly competitive buyer’s market between 2018 and 2025” for family businesses, and suggests that many owners will not get the nest egg they hoped for.
Over all, the sale of small businesses in the coming decade will involve a massive transfer of assets – estimated at between $1-trillion and $4-trillion in Canada alone. And if many of those businesses simply close up shop, it could damage the economy through significant loss of employment.
Boomers will pass a small-business baton worth as much as $4-trillion
Selling a business is harder than buying one. During the
long process of selling, with the buyer kicking the tires in interest, the
seller may find it hard to resist dropping the price as flaws and shortcomings
become magnified. But whether the owners are keen to sell or not, their top
concern will be to get the best price. Failing to get maximum valuation can
occur for those owners taking on too much of the process themselves. Why are prices adjusted downwards during a sales process?
Here are a few common reasons about why sellers may get a less than top
valuation:
1. My time is limited. Owners who have
sold their businesses often complain about how long the process can take, and
how it takes time away not only from customers, but from helping their teams
keep operations running smoothly.
Gordon Forsythe, president of Compass Capital Corp. and
buyer of companies, emphasizes the importance of knowing what you’re getting
into. “Ideally, it would be beneficial for individuals who are considering
selling their companies to understand how disruptive the sales process is to
the day-to-day operation of their business,” he says. “The sales process
typically becomes an all-consuming effort and unfortunately diverts attention
and focus that is required to effectively operate the business.”
2. I am the smartest guy in the room. The
mergers and acquisitions process is not something typical owners have done
before, or if they have, it’s not their expertise. Owners often fall into the
trap of thinking they are the best person to sell their businesses when in fact
they should be focused on continuing to run the business.
Sure enough, they usually are the smartest guy in the room
and could do whatever they want to achieve. For example, these capable
entrepreneurs could fix their own dental cavity but why not get a true expert,
the dentist? After all, dentists have trained and spent their career taking
care of patients' teeth. It is the same for transition of the business. Find
the experts and put your time into what matters more.
A mismanaged sale can have several ramifications, says Mr.
Forsythe. “If employees begin to fear for their positions, they may retreat
into self-preservation mode, and negatively affect the productivity and
direction of the company. Likewise, clients may see this as an opportunity to
re-evaluate their relationship with the company and look for alternative
suppliers. If the purchase fails to transpire, the company may have wasted
considerable resources, which would have been better spent growing the
business.”
3. Let’s sell the whole thing. Sellers
who investigate whether parts of their businesses could be carved out of the
core and sold separately are sometimes able to spin off a division. They can take
this additional capital and re-invest it into a growth strategy or use the
liquidity to pay out a family member, partner or shareholder, for example, who
wants out of the business. There’s no need go with the ‘all or nothing’ sales
strategy.
4. A bird in the hand. Along comes a
large, brand name company that wants to buy the business. If the first thing
that comes to mind is “here’s a good offer, might as well take it as I may not
get something like it in the future,” think again. When the seller chooses to
go through the courtship process without lining up a range of alternative
suitors, there’s the increased risk of falling in love with the prestige of the
impressive big brand name and accepting an undervalued sale price as a result.
5. They should be happy to get us. Every
owner thinks that his or her business is unique, and the relationships built
with customers and suppliers are special. And though this may be true, the
buyer may not feel the same way. Watch out for attitude during a sale, and exercise
humility.
Due diligence isn’t just for buyers. Smart owners should
hire their own corporate finance experts to eliminate surprises that could
reduce the sales price. The seller can then be reassured that their house is in
order and their strongest features and assets are put forward.
Jacoline Loewen is a director at UBS Bank (Canada), Wealth
Management. She focuses on transitions for family businesses and closely held
small to medium-sized enterprises, as they sell and move from being business
owners to being managers of their wealth.
In Vancouver, presenting on Sustainable Investing. Thank you to the Swiss Consulate for hosting us at the official residence of the Swiss Confederation. Great event. The thesis is that sustainable business practices can be much more than a cost, a good deed, or good public relations for businesses—it can be a source of competitive advantage. In his 35 years in the investment industry, Bruno has experienced that picking sustainable companies for investing does not mean forgoing a higher return. Bruno runs the Global Sustainable Fund which brings a way to look at the relationship between business and society that does not treat corporate profits and societal well-being (including sustainability) as just a balancing exercise. It is good business and the consequences mean lowered reputational risk to brand equity, for example. United Airlines is experiencing the social consequences of their lack of sustainable corporate culture and their subsequent employee actions which shocked the travelling client base. Bruno's investing strategy encourages public companies to discover opportunities to benefit society and themselves by strengthening the competitive context in which they operate, to determine which CSR or sustainability initiatives they should address, and to find the most effective ways of doing so. Follow On Twitter @Jacolineloewen
For me, golf is hard. I only started playing a few years ago, primarily for business, and just when I think I am getting bearable on the golf course, the season ends. When I watch the professionals play - like Annika Sorenstam - they make it look easy. Annika swings her club and her ball goes exactly where she determines it should go. I watch her play to get some tips for myself and dream that my ball could also glide across the green and thunk into the hole. Annika has recently stepped down as #1 top female ranked golf player. Her ROI on golf has been substantial - world class and a huge draw for TV viewers and golf enthusiasts.
Annike has dedicated herself to the game and is an expert. This means her game is predictable and you can be confident she will be the top of her category. Those few feet between my attempts at getting the ball in the hole and Annike's are actually worth a great deal of money - the ability to win world championships and making an income from playing the sport.
My ROI for golf is a lot of fun, getting out in the sunshine with friends and getting to play with business colleagues who cheerfully put up with my lack of competence.
What is your ROI on Golf?
Do you think schools should be teaching their students how to become wealthy? It is a teachable subject, just like driving a car?
Last week, our team visited a high school for Junior Achievement to talk about becoming wealthy which is actually achievable for every teenager who was listening in that classroom. There you have it...everyone who was listening. It was shocking to have rude comments made by the teens to the team.
Yup. Unbelievable. Unless you are a teacher...
Wealth, I believe, starts at home. Attitudes of these smarty pants kids starts at home.
Do you think they will be a client of a financial advisor in a few decades? When they had the privledge of hearing from client advisors who handle millionaires' money, they needed to realize the impact on their future lives. Most of our clients made that money themselves and also were teenagers but often their stories illustrated their dedication to learning.
When I calculate the cost of salaries and bonus of our team, plus their good will and energy put forward, I wonder about the worth of such an outreach program.
What do you think?
Pierre Ouimet and Jacoline Loewen
From our magazine, Unlimited, I read the views on teaching wealth in schools made by Finland's Minister of Education:
Dr Marjo Kyllonen is the Education Manager for Helsinki. Having devised the blueprint for the future of Finland’s school system, she is playing a pivotal role in driving these changes through. She is doing so because she sees the structure and aims of current education systems in the West as increasingly irrelevant and obsolete, relics of an Industrial Age that we started to leave behind a long time ago. She argues that we need to rethink our entire relationship to education to equip future generations with the tools they need to face the challenges to come.
Do you think we should give much priority to teaching children how to become wealthy?
No, I don’t think that’s the role of the school. Of course, we’d like everyone to have a good life and be successful. But the way you’ve put it makes me think of a world where individuals are looking out for themselves – a “me first” culture. My picture of future society is totally different – I think people need to have social responsibility and understand that no one is doing well if there are others in society who are insecure and suffering.
What should our legacy be to future generations?
It’s not only us and our kids, it’s our grandchildren and their children – if we want our little human “club” to survive in the future we really have to think: what is sustainable? And how do we teach that to our kids? Not only ecological sustainability – social sustainability, too.
If you could change one thing about the way politics on Earth works right now, what would that be?
My friend, the former NASA astronaut Ellen Baker, told me that when she was in space, she saw how beautiful our world is. And there are no boundaries. Go far enough away and Earth looks very peaceful, no borders. She said to me that our politicians should go and have a space-trip, to see how beautiful our planet is and make peace.
Recently, Firmex and Divestopedia partnered to provide transparency into Mergers and Acqisitions fee structures within North America. Their goal was to research fee structures charged for Mergers and Acquisitions by finance experts.
Currently, no mainstream published data exists that offers both buyers and sellers insights into average cost structures, what’s being charged and why. This survey actually is very much needed to help business owners understand why they need the services of finance experts beyond their accountant and what services the fees support.
Imagine my surprise when I looked at
the UBS Unlimited social networking site and found the leading article was
about my friendVicki Saunders featured as theUBS
Wealth Question – Are women changing the
way we see wealth? I was surprised
becauseUBS has the choice to
feature any successful woman around the world through the UBS supporting women initiatives. They
chose to shine the spotlight on a great Canadianentrepreneur - Vicki Saunders.
Vicki and Iare onOCAD University's business catalystadvisory boardtogether and we share acommon interest in being passionate
about supporting entrepreneurs.I
have always admired Vicki's ability to get traction for female entrepreneurs.
Just as UBS discusses in this article, Vicki is changing the definition of
wealth with VC investing.Here
is the UBS article talking aboutwealth
and VC investing:
Vicki
Saunders came to start the SheEO because she saw that current funding models
for young women entrepreneurs were broken––not only were women receiving just
4% of venture capital, but economic models optimized for growth at the expense
of everything else disadvantaged women. Here is an excerpt from the article:
“What I
have seen is that from a VC [venture capitalist] point of view we look at women
and see all the things that are wrong with them,” said Vicki when I spoke to
her, before listing many of the gendered criticisms she’d heard while working
in Silicon Valley: “women aren’t bold enough; women aren’t confident enough;
women don’t take enough risks…” Vicki, however, turned the meaning of these
insults upside down; what she heard instead was that women don’t overpromise on
what they can deliver, that they do what they say they are going to do. Studies
have shown that women often extract more value and profit from capital than
men, giving Vicki the confidence to pursue SheEO.
Surveying
the state of our economic system, Vicki argued it was time for a change. “What
if we were optimizing for wellness, or for quality of life? We made up this
current model, and it is no longer working for us, so we need a new one.
Providing women with funds and a network is the best way to bring that about.”
In my
view, Vicki Saunders took the criticisms of women entrepreneurs and understood
there is a flip side to look at women’s qualities. She had seen the perspective
of many women entrepreneurs and this experience gave her the confidence. She is
now helping women across the world create wealth. Women need to be the change they
want to see and Vicki shows that my favourite saying is true - action speaks
louder than words.
UNLIMITED* is a new venture powered by UBS, bringing together – from across geographies, sectors and
backgrounds – a unique, global network of people in search of the answers
to life’s big questions. By working in partnership with innovative
content partners including Monocle, The Future
Laboratory and VICE, UNLIMITED* will
provide a completely fresh perspective on topics that are truly significant,
through our distinctive curious approach.At UBS, this is what we do everyday.
We work with an extraordinary group of entrepreneurs and investors, and we
use our scale as the world’s largest wealth manager to help answer
life’s big questions to ensure our clients succeed. You can also join Jacoline Loewenon Twitter
@jacolineloewen
TAF Board of, Directors: Jason Kotler, Susan McLean, Jacoline Loewen, Keri Diamond, Mik Layton
The impact of investing in sustainable business is now asked about by investors. This has been the mandate for The Atmospheric Fund (TAF) and its investments. The TAF mandate is to reduce air pollution and greenhouse gas emissions in
Toronto and GTA,supporting the
City of Toronto’s target to reduce city-wide emissions by 80 per cent by 2050.
TAF invests its endowment based on a Council-approved investment policy
overseen by a blue-chip volunteer investment committee.
"Now celebrating its
25th anniversary, TAF was the brainchild of a City Council led by Mayor
Art Eggleton which created the agency in 1991 and endowed it with $23 million
from the sale of surplus City property. TAF has invested the capital ever
since, using the returns to seed innovative projects, advance game-changing
policies, and demonstrate and de-risk low-carbon solutions to help the City
achieve its ambitious climate targets. The endowment has been invested three
times over supporting over $50 million in community grants and investments and
shaving $60 million off the City’s operating budget. All this at no cost
to the taxpayer.
What are the two lessons Canada’s
senior governments can learn from TAF’s success?
First, a strategic focus is essential.
TAF produced Toronto’s first GHG inventory which revealed waste as a key source
of emissions. As a result, Toronto became one of the first cities in the world
to capture methane leaking from landfills and turn it into green power,
simultaneously shrinking a major GHG source and creating a new revenue stream.
Second, seeing is believing. The
adoption of new green technologies or programmatic approaches carries inherent
risks that are more appropriately advanced by an independent innovation group
like TAF. If a new initiative fails, municipal staff who champion the
innovation may fear being sidelined. Pilot projects designed at TAF to test and
verify results de-risked new technologies. Thus, a wide variety of advanced
technologies have been adopted across the city, from industrial wind and solar
electricity generation at Exhibition Place, to LED traffic signals, to electric
vehicle adoption in Toronto’s fleets." Read the full article here.
Julia Langer, CEO of TAF, said it was
wonderful to have so many current Board members of The Toronto Atmospheric
Fund attend the TAF@25 celebration. There were about 400 people in the
room from the business, technology, finance, environmental and government
sectors demonstrating TAF’s broad network.
Sandra was an excellent
emcee, and thanks to gamesmaster Mike Layton for making the carbon poker
game a hit.
Above all, thank you to the CEO of
TAF, Julie Langer, who leads with passion but also great organizational
ability.
Please find our TAF celebration press release here
and see highlights from Twitter here.
There is a growing interest in investing into private equity amongst wealth families with over $10 million, particularly those who made their wealth through running operating businesses themselves.
"We’ve noticed that private equity typically resonates very well especially among those families who generated their wealth by running operating businesses themselves," observes Martin Pelletier, Portfolio Manager and OCIO at TriVest Wealth Counsel Ltd, in the Financial Post, 27th September, 2016.
Pelletier goes on to quote from the most recent UBS Global Family Office Report: "We are not alone in this observation as the 2016 Campden Wealth-UBS Global Family Office Report highlights that the average family office has a 22% portfolio allocation to private equity. Approximately two-thirds of this is done through direct and co-investing rather than private equity funds. This makes some sense as it provides more control over the investment process and families can better utilize their previous hands-on business experience." (Read the whole article here.)
Wealthy families who have run their own operating companies have a comfort in understanding the due diligence required to get a grasp of the business and why capital needs to be tied up for a long time period. They also understand why there is also a higher risk premium for illiquid exposure expected to generate higher returns over the long run.
One caveat for those interested in private equity is that access to quality private equity deals is the critical requirement to achieving the returns to cover the higher fees.
Jacoline Loewen, UBS Bank (Canada), author of Money Magnet: How to Attract Investors to Your Business, (Wiley). You can follow Jacoline on Twitter @jacolineloewen
