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What’s next for the private capital markets in Canada?

In this second exclusive interview, Doug Bedard, Chair of the PCMA, tells us why boosting the profile of the private capital markets is crucial for Canadian investors.

As well as building relationships with regulators and growing awareness of the private markets, there has been a real push from the PCMA to engage its members. Why has that been so important?

Doug Bedard: We have a very active group of members who participate at both the board and committee level, and we see the benefit of that in the production of things like comment letters and responses to regulators.

It is a diverse industry, and there are many areas of specialization among the exempt market dealers registered under the national instrument 31-103. So, we try to ensure they participate at a committee level that is appropriate to their industry; it gives them the opportunity to bring their knowledge to the important issues that impact the industry.

We have a board of 31 members. A lot of people may think that aboard of that size is difficult to manage, but it isn’t. We have an extremely engaged board and a number of those people also sit on sub-committees which focus on different areas of the industry. We have subject matter experts on things like the mortgage investment industry, for instance.

We have also continued to publish our magazine, which has been well received, and we are going to do more on our website and keep up regular e-communications with our member. We also host roundtables on issues that are important to the industry. Last summer, for instance, the CSA put out 33-404, a proposal to make a number of changes to the national instrument under which exempt market dealers are registered. We hosted roundtables and put in a lot of work with members across the country to develop a response to the CSA which showed how the proposal would impact the industry.

We are very proud of that level of communication and participation.  

You were appointed as PCMA Director in 2012 and then named as Chair in late 2014. How would you describe your experiences in your various roles?

It’s more work than I originally thought! But I get so much from the people who participate, both on our board, our members, and our staff. As much time as it consumes, I am always rewarded by the relationships and the energy of the people I get to work with.

It’s been a real delight to be in the Chair, it’s been a great experience. We’ve had challenges, and things have happened in the financial industry that are difficult to predict, but the quality of the people I’ve been fortunate enough to be surrounded by has been extremely rewarding.

Do you have any specific aims for the PCMA over the next 12 months?

I think we’re heading in the right direction, but we need to have a stronger voice in Canada. We have to remember that the average Canadian investor is also a part of the financial system even if they are investing through other vehicles that have limited private positions.

I’d like to see more Canadians involved in private placements. If we look at institutional investors, like pension funds and large insurance companies, they are probably invested 50/50 in the private and public markets. The average Canadian who uses mutual funds or is self-directed probably has 99% of their portfolio in public market. That’s a balance we would like to change.

It will also encourage Canadian entrepreneurs to stay in this country rather than take their good business model or idea to a larger market like the U.S. For the sake of Canada and our financial systems, I would like to see more participation and I think we can help make that happen.

In what is an increasingly competitive industry, what piece of advice would you give to exempt marker dealers, firms and industry professionals?

If they are not already signed up, I would recommend them to think about the benefits of PCMA membership. We do the best to advocate and support our members, help with education programs, and raise the level of professionalism. The onus is always on the individual and business to do the right things and be full in their disclosure, but joining an association is probably one of the key things you can do. We see how our members benefit through the relationships they’ve made, many of which have led to partnerships and sizable transactions. We’re all in business together and we would like to create more opportunities for all our members going forward.