Former PM’s $50-million investment fund aims to promote entrepreneurs within native communities
BY PAUL WALDIE, GLOBE AND MAIL, March 11, 2009
Former prime minister Paul Martin is launching a $50-million investment fund that will target companies with ties to native communities.
The Montreal-based fund is called CAPE, or Capital for Aboriginal Prosperity and Entrepreneurship, and will be officially unveiled this morning in Toronto.
CAPE is being backed by some of Canada’s largest companies and private foundations. They include the five major banks, Barrick Gold Corp., Teck Cominco Ltd., Manulife Financial Corp., Sun Life Financial Inc., SNC-Lavalin Group Inc. and the Li Ka Shing Foundation. CSL Group Inc., which is controlled by the Martin family, is also involved.
Mr. Martin has been working on the idea for the past two years along with his son David, who is a director of CSL. They will serve on CAPE’s investment committee along with David Tuccaro, a member of the Mikisew Cree First Nation who has run several businesses in Alberta; and Robert Dickson, who managed a joint venture company in Ontario called Niigon Technologies Ltd., which involved the Moose Deer Point First Nation and Husky Injection Molding Systems Ltd.
"When I first approached the investors who are now part of CAPE Fund, I promised them nothing but a major effort at demonstrating that entrepreneurship and the role models it creates would make a difference in the lives of this and future generations of aboriginal Canadians," Mr. Martin said in a statement.
Peter Forton, the fund’s managing director, said in an interview that CAPE has a social and business agenda. "The objective of the fund is to not only earn returns for investors, but to also help develop aboriginal enterprises," said Mr. Forton, a 20-year veteran of the venture capital business. "We are looking at every single deal to leverage it on the financial and social side."
For example, he said the fund might invest in a company that serves aboriginals but is not owned by them. Over time, the fund would encourage more aboriginal ownership and management in the business.
"We believe that by applying the business discipline that you would find normally in the private sector, that this is the way to go, to not only build sustainable businesses, but also give the opportunity to aboriginals to be more involved in the management of those businesses," Mr. Forton said.
He noted that young aboriginals are the fastest-growing segment of the Canadian population. "There’s tremendous potential there if that energy and capability can be channelled."
CAPE expects to make about 10 investments at first, ranging from $1-million to $7.5-million each. Each investment will be held for up to seven years. Mr. Forton is planning to hire an aboriginal analyst to help identify potential investments and the fund has already met with several aboriginal groups to consider a variety of proposals, including resort, mining and agricultural projects.
If the CAPE fund model works, Mr. Forton said, the group will go back to its investors and create a second fund. "We’re really hoping to either build a franchise or at least a model for others to emulate."