The hunt for higher returns is luring more investors to the private debt space, prompting an increase in Canadian firms and funds that can do this specialized lending.
Connor, Clark & Lunn Financial Group Ltd. is the latest to add such a team. The Toronto-based asset manager is set to announce Thursday that it will launch a private lending arm through a new partnership with MidStar Capital Corp.
Midstar, formed by four leveraged-finance specialists formerly of GE Capital, will underwrite and manage loans to mid-sized Canadian companies that are doing deals, looking to grow or need to refinance their existing debts.
Bay Street's smallest dealers still under threat despite sunnier outlook
With commodity prices rebounding and stock markets popping since the U.S. election, Bay Street is finally feeling more optimistic. But the industry's own expectation is that the recent shift still won't be enough to benefit all dealers – particularly the smallest of the bunch.
In its latest annual survey of 132 member firms, the Investment Industry Association of Canada (IIAC) found a "general optimism" amongst investment dealers, with executives less concerned about the impact of a major market shock – such as the oil price crash, which began in 2014. A year ago, the oil rout had a devastating effect on morale.
But the outlook remains tough for small dealers, providing little solace for firms that have already endured several years of hardship. Many Canadian boutiques specialized in advising and investing in energy and mining firms, but the commodity-price rout that started in 2012 forced much of their business to dry up.
DAILY DEALS
Sears Holdings Corp. agreed to sell its Craftsman tool brand to Stanley Black & Decker Inc. for about $900-million (U.S.), marking chief executive officer Edward Lampert's third move in the last two weeks to prop up the beleaguered retailer with fresh sources of funding. Story
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