With the federal election over, a coalition of asset managers is looking to use the national mood to promote a friendlier environment for firms entering the Canadian market.Nathan Denette/The Canadian Press
U.S. President Donald Trump’s tariffs and annexation threats have breathed new life into pushes for national energy corridors and interprovincial trade. But what about capital markets?
With the federal election over and Mark Carney’s Liberals set to govern, a coalition of asset managers is looking to use Mr. Trump’s threats and the national mood to promote a friendlier environment for firms entering the Canadian market.
The Canadian Asset Management Entrepreneurship Alliance (CAMEA) says not enough new asset managers are launching in Canada. It also warns that too many assets are flowing to the biggest global asset managers amid industry consolidation.
CAMEA, a new industry group formed by the Alternative Investment Management Association (AIMA) Canada, CFA Societies Canada, the Portfolio Managers Association of Canada and the Emerging Managers Board, released a white paper with policy proposals to grow Canada’s asset management sector.
“Industry consolidation is probably the singular challenge we face,” said Michael Thom, managing director of CFA Societies Canada, at an event in Toronto on Wednesday.
He pointed to recent acquisitions of private market firms. “The large get larger, not just in Canada but around the world,” Mr. Thom said.
For example, New York-based BlackRock Inc. recently bought Global Infrastructure Partners LLC and HPS Investment Partners LLC.
The new association proposed several measures to make it easier for new firms to enter Canada’s asset management space, including targeted tax incentives and regulatory changes.
These include increasing access to independent products at dealer firms in Canada and creating a “fund-focused” corporate structure for Canadian asset managers that competes with fund vehicles in tax-neutral jurisdictions.
It also proposed creating an economic development agency to promote Canadian asset managers globally.
“Canada enjoys a stable legal, political and regulatory environment that investors trust,” Mr. Thom said. “Let’s appreciate that in this moment as an inherent advantage as a trading nation in a world that’s quickly deglobalizing while capital stays mobile.”
The paper held up the Quebec Emerging Managers Program as a funding model for new asset managers that allows them to manage compliance and operations costs while growing and focusing on investment management.
Speaking on a panel at the event, Jamie Wise, chief executive officer of Periscope Capital Inc., said there’s an opportunity to move on policies that reduce barriers between provinces now that the election is over.
“We may have had our elbows up in this country, but now we’ve been forced to think about the bigger picture of what we can accomplish,” he said.
One of those opportunities is bringing talent back to Canada from the U.S. Mr. Wise spoke about the number of Canadians in New York when he started his career there almost three decades ago.
“They were there because that’s where the opportunity was,” he said. “Some of those Canadians might be thinking this would be a good time to come home.”
Another one of the proposals was a tax credit for asset managers opening Canadian offices or relocating staff and operations in Canada.
Mr. Thom said we often hear that Canadian expatriots want to bring their careers home and that Canada remains a desirable place to live and work.
“Let’s create the business conditions to follow through and turn those into new Canadian businesses,” he said.
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