Canadian Global Growth Forum: Converting Opportunity into Investment

The Canadian Venture Capital Association brought together a group of global investors and Canadian entrepreneurs for the Canadian Global Growth Forum, on September 14. Davies was proud to participate as an industry sponsor.

A recurring theme throughout the Forum was the strength of Canada’s investment proposition. Rule of law, political and institutional stability, sophisticated capital markets and a highly educated workforce have long been Canadian advantages. As geopolitical and trade relationships become less predictable, global investors are placing greater value on these attributes.

The following themes emerged from the Forum.

Canada’s Strategic Advantages Are Becoming More Valuable

Investment decisions are increasingly being shaped by considerations that extend beyond traditional financial and commercial factors. Governments, institutional investors and businesses are focused on issues including AI sovereignty, defence and technology security, energy security and supply-chain resilience.

Canada has advantages that intersect with many of these priorities, including abundant sources of clean energy, technology and research capabilities, natural resources and established relationships with major global markets. These advantages can create differentiated investment opportunities, and many Canadian businesses are using these advantages to grow into world-class enterprises.

Thinking Globally Earlier

For many Canadian businesses, particularly in technology, AI and defence, international markets are increasingly part of the growth strategy from an early stage. Expanding the customer base beyond Canada can provide access to larger markets, increase growth opportunities and reduce reliance on any single geography.

This also creates opportunities for international investors and strategic partners. Capital can bring more than financing: investors with established relationships, customers and networks in international markets can help Canadian companies accelerate expansion. Fund investments, M&A, joint ventures and strategic partnerships can all provide avenues for building those relationships. As these relationships are explored and established, foreign investors and Canadian businesses alike will need to consider how Canada’s foreign-investment regime may apply, particularly for the defence, tech and AI sectors.

Creating Opportunities to Scale

Canada has a significant pipeline of attractive mid-market businesses and assets, including in areas such as clean technology, AI and defence. For the world’s largest institutional investors, however, the ability to deploy capital at sufficient scale remains an important consideration. 
This creates opportunities for Canadian fund managers to provide international investors with efficient access to Canadian investments through blind-pool funds, customized mandates, co-investments and other structures.

For Canadian managers, the opportunity is not simply to attract international capital to individual investments, but to build relationships that can support recurring allocations to Canada over time.

Turning Opportunity Into Execution

Canada is well positioned to benefit from greater global interest in trusted markets, strategic industries and diversified sources of growth. At the same time, international capital has choices. Canada’s ability to capture that interest will depend on creating investable opportunities, facilitating capital deployment and connecting Canadian businesses and investment managers with global markets.

Recent federal initiatives also reflect a greater focus on converting investor interest into capital deployment. The Canada Investment Summit is bringing global investors together around Canadian opportunities, while major projects are being advanced through the Major Projects Office. The CRA’s decision to prioritize advance income tax ruling requests related to investments of $1 billion or more in Canada may also provide greater tax certainty for large-scale investments.

For Canadian businesses and fund managers, this may mean thinking differently about scale, sources of capital, international partnerships and transaction structures. For international investors, it creates opportunities to access Canadian businesses, assets and managers at a time when Canada’s traditional strengths are becoming increasingly aligned with global investment priorities.

Davies works with Canadian and international investors, fund managers and businesses across the lifecycle of these opportunities – from fund formation and capital deployment to M&A, joint ventures, strategic partnerships and other investment structures. Davies also regularly advises international investors and Canadian businesses on the application of Canada’s foreign-investment framework. We are well positioned to help our clients capitalize on current investment opportunities in the Canadian market.