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March 6, 2018
REPORT TO: DEBBIE COMIS, CHIEF ADMINISTRATIVE OFFICER
FROM: LUCKY BUTIERWORTH, DIRECTOR OF FINANCE
SUBJECT: ADD NEW INVESTMENT SUPPLIER
PURPOSE: Propose to add Canaccord Genuity to City's Investment supplier list.
EXECUTIVE SUMMARY:
The City currently has three suppliers of Investments (RBC, Raymond James, and Canadian Western Bank) who provide the City with GIC investments, term deposits and interest bearing savings accounts. Most of our GIC's were purchased through the Raymond James Cash Management Group over the last 5 years who have the biggest supply of credit unions offering GIC's of our three investment suppliers.
In February the Cash Management Group from Raymond James moved their entire staff of 14 from Raymond James to Canaccord Genuity. According to the Cash Management Group, this has given them access to new GIC suppliers plus all the GIC suppliers they had under the Raymond James umbrella.
RECOMMENDATION:
1. THAT the report from the Director of Finance dated March 1, 2018, entitled "Add New Investment Suppli er" be received.
2. THAT Canaccord Genuity be added to the City's Toronto Dominion direct transfers template to allow for direct investments in GIC's with the Cash Manage ment Group at Canaccord Genuity.
3. THAT the Director of Finance and Mayor be authorized to approve the setup of the Can accord Genuity account for the City.
4. THAT the Director of Finance and Mayor be authorized to sign the Toronto Dominion documents setting up the funds transfer template to the new Can accord Genuity account.
BACKGROUND:
The City currently has three investment advisors who supply low risk investment alternatives to the City. The investments are primarily GIC's or other fixed deposit notes issued by banks or credit unions. The Add New Investment Supplier Page 2 of 3 current low interest environment has greatly reduced the interest income the City is able to generate from accumulated surpluses and reserves. Over the last number of years with the low interest rates, we have found that Credit Unions generally offer higher returns on the GIC's than the big banks are offering. The credit unions GIC's are also 100% backed by Credit Union Central or their respective provincial governments in BC, Alberta, and Saskatchewan. All of our credit union GIC purchases have been through the Cash Management Group at Raymond James since 2013. We continue to monitor the GIC rates of the credit unions and big banks and purchase the best available rate when we are re-investing our maturing GI C's.
In February 2018 the entire Cash Management Group at Raymond James moved over to Canaccord Genuity. They have reached out to the City to open an account with them at Canaccord Genuity. The Cash Management Group has given the City good se rvice and results in our GIC investments and has greatly increased our GIC returns over the GIC rates offered by the Big Banks. I have had a discussion with the manager at Raymond James and he has indicated they will continue in the cash management business and continue as the holder of our GIC's certificates until they mature. Upon maturity they will provide a reinvestment rate for GIC's they can offer. The Cash Management Group at Canaccord will also provide a rate offer and if we have an account with them, we would be able to select the best rate option between Canaccord and Raymond James.
Canaccord was established in 1950 years and currently has offices in 10 countries according to their website. See Wikipedia summary attached to this report for further background.
OPTIONS
1. Add Canaccord Genuity as an authorized Investment manager for the City's GIC. 2. Maintain the three investment advisors we currently use .
ANALYSIS
Option 1: This option will allow us to maintain our relationship with the Cash Management Group that we have been dealing with for almost 5 years. It also gives us access to an increased GIC base as Canaccord Genuity has a relationship with a few additional credit unions that the Cash Management Group at Raymond James did not have access to. Under this option, we would have better competition for our GIC business as we would still have the option to purchase GIC's from Raymond James if they offer higher rates or the Cash Management Group at Can accord.
Option 2: Maintaining our current three investment suppliers simplifies things as no new acco unt setups will be required. However, since the Cash Management Group has left Raymond James we do not have any continuing relationship with the employees at Raymond James although their manager has indicated he would be able to provide us with reinvestment rates on maturing GIC's. Cheque Signing Authorization Policy No 6.11 Page 3 of 3
FINANCIAL IMPLICATIONS:
Add ing further investment institutions to our list of investment alternatives will increase the return the City earns on investments without adding further risk.
STRATEGIC PLAN CONSIDERATIONS:
Maintain or Enhance Quality of Life - No impact.
Renewal and Maintenance of Infrastructure - no impact
Maintain or Enhance Levels of Service - no impact Maintain or Reduce Actual Property Tax Burden - slightly higher investment returns benefits the taxpayers as it could reduce the property tax burden if enough extra interest is earned.
Environmentally Sustainable - no impact
Economic Development - no impact
Respectfully submitted,
G. LU CKY BUTIERWORTH, CPA, CGA Director of Finance
CHIEF ADMINISTRATIVE OFFICER COMMENTS:
Debbie Comis Chief Administrative Officer Canaccord Genuity - Wikipedia Page 1 of 5
WIKIPEDIA Canaccord Genuity
Canaccord Genuity Group Inc. CANACCORD Genuity Type Public Traded as TSX: CF (https://web.tmxmoney.com/quote.php?qm_symbol=CF:TSX) LSE: CF. (http://www.londonstockexchange.com/exchange/searchengine/search.html? q=CF.) Industry Financial services Founded 1950 Headquarters Vancouver, Canada Area served Worldwide
Key people Daniel Daviau (Chief executive officer) Services investment banking, private banking, wealth management
Revenue .A C$ 855 million (FY 2014)[11
Net income .A C$ 51 million (FY 2014)[11
AUM A C$ 31.3 billion (FY 2014)[21 Total assets .A C$ 5.01 billion (FY 2014)[11
1 Total equity .A C$ 1.38 billion (FY 2014)l J Number of 2,031 (2013) employees Website www.canaccordgenuitygroup.com (http://www.canaccordgenuitygroup.com/)
Canaccord Genuity Group Inc. is a global, full-service investment banking and financial services company that specializes in wealth management and brokera~ in capital markets. It is the largest independent investment dealer in Canada.131 The firm focuses on growth companies, with operations in 10 countries worldwide and the ability to list companies on 10 stock exchanges. Canaccord Genuity, the international capital markets division, is based in Canada, with offices in the US, the UK, France, Germany, Ireland, Hong Kong, China, Singapore, Australia and Barbados.l4ll5ll5ll 7l
Canaccord Genuity provides mergers and acquisitions, corporate finance, restructuring, debt advisory and strategic advice fo r corporate, government and private equity clients globally. The firm's practice covers a broad range of industries including: aerospace & defence, agriculture, clean technology & sustainability, consumer & retail, energy, financials, health care & life sciences, infrastructure, leisure, media & telecommunications, metals & mining, real estate & hospitality, technology, transpo1tation & industrials, and private equity.181
https ://en. wikipedia.org/wiki/Canaccord_ Genuity 01/03/2018 Canaccord Genuity - Wikipedia Page 2of5
Landmark transactions have included advising Amaya Gaming Grou:Q in its $4.9 billion acquisition of PokerStars and Full 10 Tilt Poker,191 advising Yamana Gold's $3.9 billion joint acquisition with Agnico Eagle of Osisko Mining,! 1 advising Primaris REIT's hostile defence and $5.0 billion sale to H&R REIT and KingSett Capital led consortium,1111 advising 2 Viterra's $6.1 billion sale to Glencore,!1 1 and advising the $2.2 billion cross-border sale of Daylight Energy to Sinopec, a 1131 4 unit of China Petrochemical Corp. It has also advised on GLENTEL's $670 million sale to Bell Canada in 2014,11 1 and the sale of Canada Goose (clothing) to Bain CapitaI.!1 5l In 2012, it advised on Extorre Gold Mines' $404 million sale to Yamana Gold.!151
In 2013, Canaccord Genuity team put together a consortium of major investors, including Schroders and Threadneedle Investments, in participating in a takeover bid proposal for 316 bank branches of the Royal Bank of Scotland (RBS). 1171 Two buyout firms, Apollo Management and JC Flowers, also submitted a joint offer. In 2011, the firm advised the $3.2 billion sale of Converteam from Barela~ Private Equity and LBO France to General Electric, growing the GE Power Conversion business.1181 In the same year, Canaccord Genuity also advised the Bank of Ireland on the disposal of a c.£i.3bn UK commercial real-estate loan book to California-based Kennedy Wilson and institutional partners for a consideration of c.£i.07bn, over 80% of par value despite both the poor UK commercial real estate and lending market conditions at the time. 1191
In 2006, Genuity Capital Markets co-advised Advanced Micro Devices (AMD) on its $5-4 billion acquisition of ATI Technologies.1201 Genuity also advised General Electric (GE) on multiple acquisitions, including the $3.8 billion disposal of GE Advanced Materials to Apollo Global Management, $484 million buyout of 49.9% of GE Toshiba Silicones, $602 million buyout of 29.9% of GE Bayer Silicones, $435 million acquisition of Biacore AB, and $230 million acquisition of Radstone. 121 n22n23)[24J
As for restructuring mandates, Canaccord Genuity advised Yellow Media on its $2.7 billion debt recapitalization in 2012. [25)
Contents
Business divisions Leadership History References
Business divisions
Global Capital Markets!251
• Investment Banking - M&A, Corporate Finance, Restructuring, Debt Advisory, Strategic Advice • Research • Sales and Trading • Fixed Income
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Wealth Management
• $31.3 billion in assets under management in Canada, the UK & Europe, and Australia. 1271 • Canaccord Genuity Wealth Management and Credit Suisse Asset Management Partnership: In April 2016, Canaccord Genuity Wealth Management announced a strategic partnership with Credit Suisse Asset Management (CSAM). The partnership will provide Canaccord's high-net-worth investors with portfolio management tools and exclusive access to a new suite of high-net-worth products.1281
Leadership Some of Genuity's former partners and current executives include:
• David J. Kassie (former Chairman and CEO of CIBC World Markets and founder of Genuity Capital Markets) • Daniel Daviau (former Head of Investment Banking at CIBC World Markets and found ing member of Genuity Capital Markets) • Calin Rovinescu (current CEO of Air Canada and founding partner of Genuity Capital Markets) • Alexis de Rosnay (former co-head of UK Investment Banking and Vice Chairman of Lazard)
History
The company was established in 1950 as Hemsworth, Tutton & Co., a Western Canadian venture capital firm.12 91
In 2006 Canaccord Capital purchased Adams, Harkness & Hill Financial Group Inc., a Boston-based investment dealer. The firm renamed this US division Canaccord Adams.
In 2009 Canaccord Capital was renamed Canaccord Financial.1301
In 2010, Canaccord Financial acquired Genuity Capital Markets in a cash and share deal worth about $286 million. Genuity Capital Markets, founded in 2005, had 135 employees with offices in Canada and the U.S. and was a leader in independent advisory and restructuring in Canada.1311
On October 1, 2013, Canaccord Financial was renamed Canaccord Genuity.
Canaccord Genuity acquired Collins Stewart Hawkpoint in 2011.1321
In 2012 Canaccord Genuity acquired Eden Financial, a London-based wealth management business.
In 2015, the firm was ranked 17th in the branche-internal "Top 25 Investment Bank to Work For" survey by Vault.com.1331
In September 2017, Canaccord Genuity announced complete acquisition of Hargreave Hale Ltd.1341
References
1. "Stock Market Quotes I Company Financials, Financial Information" (http://web.tmxmoney.com/financials.php? 9.!!l symbol=CF&type=lncomeStatement&rtype=A1. Web.tmxmoney.com. Retrieved 2015-03-27. 2. [ 1] (http://www. canaccordgenu ity .com/en-CNwm/Wealth-Management-Canada/Choose-Ca naccord/) 3. "An interview with Canaccord Financial CEO Paul Reynolds - CEO.CA" (http://ceo.ca/2013/04/19/paul-reynolds/). Ceo.ca. Retrieved 2015-03-27.
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