Canada to launch retail securities to seed sovereign wealth fund
The Canada Strong Fund will invest in domestic technology, artificial intelligence and energy infrastructure projects, according to government documents.
The Canadian government plans to introduce guaranteed securities for retail investors early next year to provide initial capital for a new sovereign wealth fund, according to a Mint report citing Bloomberg.
The vehicle, named the Canada Strong Fund, will have a mandate to invest only within Canada. It will co-invest in federal projects like energy infrastructure and electrical generation capacity, while also holding shares in high-potential Canadian technology and artificial intelligence firms.
Finance Minister François-Philippe Champagne's budget on Thursday detailed that the government will provide C$25 billion ($17.9 billion) to the fund. The fund will also receive proceeds from the sale of principal-protected notes to retail investors.
These notes, which may have maturities of five, seven, or 10 years, will offer downside protection to holders while allowing them to participate in equity gains if the fund performs well.
Prime Minister Mark Carney, who announced the fund in April, aims to use the vehicle to mobilise C$1 trillion in private and public investment over five years. The government recently noted that a planned C$1.6 billion investment in Cohere Inc. serves as an example of the types of deals the fund could undertake.
Additionally, the government intends to sell 40- to 50-year concessions for its major airports through a bidding process. The sovereign wealth fund and local Indigenous communities are expected to take equity stakes in those deals, with an operator to be selected by early 2029.