The development capital leader in QuÉbec
The last financial year is a good example of the major impact the Fonds de solidarité FTQ has on the Québec economy: the Fonds invested $908 million in nearly 140 companies across Québec including its 16 regional funds.
The positive return of 12.5% on our private securities and specialized funds in companies impacting the Québec economy is a testament to the general strength of this portfolio, which was emphasized in this year of uncertain economic conditions.
Our partner companies understand the importance of strengthening their growth strategies, and several successfully stood out in international markets over the years. With a good understanding of both their markets and competitors, they were able to innovate and design competitive products and services.
The Fonds made investments in companies in all segments of Québec's economy. Here are just a few examples:
$50 million in Coop fédérée, the largest agrifood business in Québec;
$14.7 million in Stornoway Diamond Corporation in the Nord-du-Québec;
$7.5 million in the Montreal Impact soccer club;
$3.25 million in Maetta Sciences, a company specialized in manufacturing medical implants and instruments;
$2 million in Acquisio, to help the company position itself on the international online advertising management market and thereby create numerous jobs in Québec;
$2 million in PG Hardwood Flooring, a company known for its quality hardwood floors.
This last investment is worth highlighting because it is a good example of vertical integration unique to Québec. PG Hardwood Flooring is supplied exclusively by Scierie Dion et fils, a company in which the Fonds invested in 2010; in addition, the quality hardwood that goes into floor manufacturing is sourced from forest lands belonging to Perthuis, a company owned by Gestion Dion and Solifor (a subsidiary of the Fonds de solidarité FTQ). Lastly, PG Hardwood Flooring sells its products through the network of BMR Group, another Fonds partner company.
Meeting the needs of companies, especially SMEs
In addition to being present in all sectors of Québec's economy, the Fonds meets the needs of companies in each stage of their development, in some cases, all the way to their going public or supporting them on financial markets. The Fonds also provides important support in the succession of Québec companies. In fact, since 2000, the Fonds and its regional funds completed 127 business transfer projects, for investments totalling $228 million.
SMEs (companies with fewer than 100 employees) continue to occupy a significant place in our investment portfolio. As at May 31, 2012, 77% of the Fonds and the regional funds' partner companies were Québec SMEs. Productivity improvements, product development, marketing and acquisition support are at the centre of our activities.
The Fonds Valorisation Bois
The Government of Québec's budget tabled in March 2012 showed once again the Fonds' role as an essential actor for ensuring Québec's economic future.
With the creation of the $170-million Fonds Valorisation Bois, in which the Fonds de solidarité FTQ will invest $75 million, we will be able to provide forest product companies that are currently well-positioned in their markets the capital they need. This support will help them develop high value-added forest products and finance potentially profitable projects involving secondary and tertiary processing of wood products.
A diversified portfolio
In total, 20% of the Fonds' investment portfolio is made up of companies in the life sciences, information technology and telecommunications sectors. Other investments are made in companies in over 20 sectors of the traditional economy, including transportation, textiles, plastic, recreational tourism, natural resources, agrifood, financial services, construction, aerospace and real estate.
Dialogue on innovation
"Internal (organic) growth is what generates the most value for companies, and by putting innovation at the forefront, CEOs will be able to create more wealth. To do this, they must look forward to get a clear vision of what is to come, not in the rear view mirror to comfort themselves with past success!" These are the words that the internationally renowned speaker Eric C. Haseltine, specialist in the human brain and innovation, used in his May 2, 2012 speech to about 50 heads of partner companies of the Fonds de solidarité FTQ at the Pointe-à-Callière Museum in Montréal. With the theme "Innovation Space," the attendees had the opportunity to discuss after Mr. Haseltine' speech, who challenged them to "see differently" to succeed at "undoing" the normal functioning of their brain to encourage innovation, which is the cornerstone of a company's growth. This dialogue on innovation with our partners was a big hit.
Building the future
This year the Fonds immobilier de solidarité FTQ celebrates 20 years of commitment and investments in profitable, job-creating real estate projects in partnership with industry leaders. Over the years, it invested over $1 billion in more than 300 real estate projects that generated positive returns year after year and created or maintained about 26,300 jobs.
Investing and creating jobs
The Fonds immobilier plays an accelerating role in the start-up of many projects. During its last financial year, which ended December 31, 2011, it acquired approximately 350,000 square feet of land to build three large-scale projects across Québec. It also committed to the development and construction of some 15 residential, office and commercial buildings with a value exceeding $1.1 billion. At the end of the day, these buildings will have contributed to creating or maintaining 9,028 jobs in Québec, according to the Institut de la statistique du Québec. During that same financial year, the Fonds immobilier sold 10 buildings for $142 million.
As a responsible investor, the Fonds immobilier is concerned with the needs of low- and middle-income households. Consequently, during the last financial year, it partnered with groupe Merlin immobilier for the VersO project, in Lachine, which will offer 123 affordable housing units starting in Spring 2013.
Constructing environmentally-friendly buildings is another priority of the Fonds immobilier. For example, the Bassins du Havre condo project, located on the banks of the Lachine Canal in Montréal and carried out in partnership with Prével, Claridge and Rachel-Julien, targets the LEED® certification. The first phase of this project should be completed in Fall 2013.
A greener Board of Directors
To improve their practices and reduce their paper consumption, the management and members of the Board of Directors of the Fonds immobilier have "gone green." Since May 2012, hard copies of the documents for the Board of Directors and the various management committees meetings have been gradually eliminated and replaced by a Web platform. The electronic tablet has therefore become a most effective and profitable tool. In one year only, this new practice saved a dozen trees, over 80 binders and the ink needed to print close to 8,500 sheets, as well as reduced greenhouse gas emissions.
Companies that stand out!
Several partner companies of the Fonds de solidarité FTQ and their leaders stand out and receive awards that honour their strong performances. We cannot name them all, as the list would be long, but following are some examples of awards they received during the last financial year.
Francine Mondou, President of Harmonium International inc., a biotechnology company and former partner company of the Fonds, was awarded the Prix Capital Entrepreneur given by Réseau Capital for her significant actions that contributed to Québec's economic development.
Dr. Robert Heft, who was President of Enobia Pharma from 2005 to 2012, received Canada's Venture Capital & Private Equity Association's Entrepreneur of the Year Award.
Serge Gendron, President of AGF Group Inc., was awarded the 2012 Grand Prix d'excellence of the Ordre des ingénieurs du Québec.
Premier Tech (horticulture and agriculture, industrial equipment and environmental technologies) received the Virage-Famille certification in recognition of its efforts in balancing work and family life. Premier Tech Aqua (Premier Tech's environmental technologies subsidiary) won one of the Prix Phénix de l'environnement, the highest environmental distinction awarded in Québec; it also won the Sustainable Development - Complete Life Cycle award for innovation, awarded by the Federation of Plastics and Alliances Composites.
Solmax International Inc., an environmental geomembrane manufacturer, has been ranked one of Canada's 50 Best Managed Companies, which were selected by an independent jury as part of a program sponsored by Deloitte, CIBC, the National Post and Queen's School of Business.
Texel, a division of ADS and manufacturer of needlepunch nonwoven fabrics for technical use, received the Healthy Enterprise certification for its commitment to its employees' health and wellbeing. This certification is awarded by The Healthy Enterprises Group, which supports companies in integrating general occupational health best practices.
Congratulations to all these award winners!