In a yr many bankers and corporations referred to as “difficult” for preliminary public choices, one unbiased Canadian agency bucked the development — outperforming the nation’s largest banks within the course of.
Canaccord Genuity Group Inc. earned prime spot for arranging IPOs for the primary time in its historical past. The Toronto-based mostly agency additionally prolonged its streak of managing the most important variety of Canadian fairness financings for the third yr in a row.
“IPOs aren’t straightforward: they’re robust to get completed, usually talking, and we’re good at that,” Canaccord Genuity Chief Government Officer Dan Daviau stated in an interview at Bloomberg’s Toronto workplace. “We’re entrepreneurial, we’re agile, we’re aggressive, we’re all these issues that you really want in case you’re an issuer.”
Canaccord’s No. 1 rating for IPOs is available in a yr that noticed giant inventory gross sales led by the large banks pulled, together with GFL Environmental Inc. and Triple Flag Valuable Metals Corp. Nonetheless, corporations raised about $three billion (US$2.three billion) from Canadian IPOs in 2019, up thirteen per cent from 2018, in response to knowledge compiled by Bloomberg. Rankings and knowledge are as of Dec. 30 and should change as extra offers are recorded.
Canaccord oversaw 20 IPOs and claimed fifty six per cent share of the whole quantity raised in Canada, the info present. The agency’s experience with particular function acquisition corporations helped, after managing choices by Subversive Capital Acquisition Corp., Mercer Park Model Acquisition Corp. and Bespoke Capital Acquisition Corp. SPACS, as they’re recognized, are publicly traded swimming pools of funds set as much as make acquisitions. These three IPOs collectively raised US$1.34 billion, priced in U.S. foreign money. Citigroup Inc. ranked second after working with Canaccord on Bespoke, its solely Canadian transaction. Financial institution of Montreal was third.
Canaccord benefited by its give attention to riskier mid-sized corporations that enormous Canadian banks are likely to ignore. It’s additionally competing with fewer companies amid business consolidation. This yr, its closest rival, GMP Capital Inc., bought its advisory and buying and selling enterprise to Stifel Monetary Corp.
Corporations raised $29.6 billion from secondary share gross sales in Canada in 2019, with Morgan Stanley rating No. 1 with sixteen per cent of the marketplace for fairness and fairness-linked financing — the primary time a overseas agency took prime spot since 2000, the info present. The New York-based mostly agency organized two gross sales for Restaurant Manufacturers Worldwide Inc. totalling US$three billion, had a task on Shopify Inc.’s US$694-million providing in September and lead a US$354-million deal by Algonquin Energy & Utilities Corp. in October. Royal Financial institution of Canada was second with a thirteen per cent share adopted by Financial institution of Montreal with 12 per cent. Canaccord was fifth with a 9.5 per cent share, however managed probably the most fairness gross sales general at sixty seven.
Overseas companies additionally dominated advisory work for takeovers involving Canadian corporations after being credited for a variety of international offers touching the nation’s pension fund managers. Canadian entities have been concerned in three,682 introduced takeovers valued at US$331.1 billion to Dec. 30, the info present. The most important was London Inventory Change Group Plc’s US$27 billion takeover of Refinitive Holdings Ltd., a monetary knowledge and buying and selling platform owned by Blackstone Group Inc., Canada Pension Plan Funding Board, Singapore’s sovereign wealth fund and Thomson Reuters Corp.
Daviau, whose agency suggested on 21 takeovers totalling US$5.eighty five billion, stated personal fairness and enormous institutional buyers will “one hundred per cent proceed to drive acquisition exercise.”
“Values are good proper now: the market is excessive, inventory costs are usually fairly good, individuals really feel fairly snug about utilizing that paper to purchase one thing or equally promote themselves,” Daviau stated. “For the subsequent six months it seems like a really robust M&A market.”
Daviau sees a “notably lively” market in Canada for know-how and mining, which he anticipates can be “strong” subsequent yr with extra transactions, particularly these concerned in valuable metals.
Hashish corporations will proceed to seek out it arduous to boost capital, although Canaccord is turning into more and more lively in doing debt financing for the business, and consolidation is on the rise, he stated.
Canaccord’s deal-making good points aren’t prompting Daviau to deviate from his technique of increasing wealth administration to offset capital markets volatility. The agency pivoted a pair years in the past as an prolonged droop in useful resource markets eroded their funding-banking enterprise.
“We’re a wealth supervisor with an funding financial institution hooked up to it now,” he stated. “It’s not nearly all of our income, however it definitely is almost all of our earnings.”
Canaccord has greater than doubled Canadian belongings beneath administration to $20 billion since fiscal 2016, whereas turning its as soon as cash-dropping North American wealth division into one which earned $26.eight million revenue final fiscal yr. The agency has employed forty one advisory groups for the Canadian wealth enterprise prior to now 18 month and plans so as to add extra.
He’s additionally involved in shopping for any home wealth managers not owned by the large banks, together with Richardson GMP and the Canadian operations of Raymond James Monetary Inc. in the event that they have been on the market.
“We don’t consider there’s numerous wealth transactions on the market, however clearly if one turned out there we might have an interest,” Daviau stated.