Desjardins launches $45-million fintech fund

Desjardins Group is launching a $45-million fund to invest in financial technology startups as it seeks to build more direct relationships with a nascent sector that once looked poised to disrupt traditional banking.

The new fund will make investments ranging from a few hundred thousand dollars to as much as $3-million, taking stakes of 10 per cent to 25 per cent in early-stage “fintech” companies. It will be managed by Desjardins Capital, the financial co-operative’s venture capital arm, which has invested in more than 400 companies.

The fund builds on existing partnerships and investments Desjardins has made with more than 20 fintechs dating back several years. The burgeoning fintech sector was once seen as a threat to established institutions such as Desjardins but, faced with the high cost and difficulty of acquiring new customers, many fintechs have changed course and have begun collaborating with large financial companies to help them with the transition to digital banking and insurance services.

By creating this new fund, Desjardins is looking to take tighter control of its investments in financial technologies, and to sharpen its focus on products and services that can directly contribute to its strategy, from innovation in insurance and wealth management to strengthening cybersecurity.

Desjardins has already pumped $25-million into Luge Capital, a venture fund focused on fintech and artificial intelligence that launched last year with a total of $75-million from backers such as Caisse de dépôt et placement du Québec and Sun Life Financial. Desjardins will continue to back Luge, but now wants to make its own investment decisions as well. Whereas past investments have often been confined to startups in Quebec, the new fund will also seek out opportunities in the United States, Britain, Europe and Australia.

“With $45-million, we can do a lot,” said Guy Cormier, chief executive of Desjardins Group. “There’s a lot of noise, there’s a lot of buzz in the fintech industry, and we just have to be quite careful and quite clever about the kind of partnerships [we choose]. We really know what we want to do, what we want to accomplish, so we’re not trying to go everywhere. But with this fund now we have more capacity.”

The fund’s first investment falls outside the normal boundaries of fintech. Desjardins is putting $400,000 into X-TELIA Group Inc., a company that operates a wireless network tailored to home automation and connecting the so-called internet of things, to help expand its network across Canada. Desjardins sees applications to home and auto insurance, but is also a major lender to the agricultural sector, and X-TELIA connects smart sensors on farmers’ grain silos to make it easier to manage inventory.

“We want to add to our offer. It’s not any more enough for a financial institution to do the financing or to do the everyday banking,” said Martin Brunelle, vice-president of transformation and special projects at Desjardins. “What we want is to ease the lives of our members or our customers.”

Three other fintech companies are currently in the pipeline to receive investments from the new fund, Mr. Brunelle said. But they are at different stages of maturity and some could take years to bear fruit, if they flourish at all.

“The first goal is not return on investment for us. It’s really to build a relationship that is stronger, tighter with these fintechs, and will help us to build something that is great for our members and clients,” Mr. Cormier said. “The return on investment will be there maybe in a few years.”

Source: The Globe and Mail

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Large law firms working together on blockchain M&A technology

Written By Anita Balakrishnan

Several major Canadian law firms are working together on a pilot project to make a “smart contract” using Ethereum blockchain.

Technology firm OpenLaw announced the project, which includes Bennett Jones LLP, Blake Cassels & Graydon LLP, Davies Ward Phillips & Vineberg LLP, Fasken Martineau Dumoulin LLP, Norton Rose Fulbright LLP and Stikeman Elliott LLP.

The six-month pilot with a consultancy called GenesisB focused on automating a merger and acquisition escrow agreement, OpenLaw said in the announcement.

“It’s really efficient when it’s fully realized,” she says. “I’m a big believer in what will be enabled through all kinds of projects like this.”

Bennett Jones partner Simon Grant, one of the lawyers who worked on the project, says the project was a “phase one” trial that used a real escrow agreement and model but not client funds. Since the project, however, Bennett Jones has worked separately with clients on putting smart contract technology into practice, using skills learned in the OpenLaw project, says Grant.

Grant says that by removing the need for an individual to act as an escrow agent, automation can be used not only in mergers and acquisitions but other types of transactions such as financing or even transactions where escrow isn’t currently used because it is too complicated.

“The collaboration . . . was among multiple law firms, but it was also between lawyers and programmers — being in the same room at the same time building this project for the ground up,” says Grant. He says that Toronto is a hub for exciting work on blockchain and other technology.

“What [technology companies] may not have is training on how contracts are understood and treated legally,” says Grant.

Anthony de Fazekas, head of technology and innovation for Norton Rose Fulbright Canada in Toronto, says it was important for companies such as OpenLaw to get the perspective of a variety of law firms, so different lawyers could have input on the legal parameters and standards of turning a traditional document-based contract into a smart contract.

“We are already seeing the trend [toward smart contracts] in client projects. With a smart contract, you’re going to need a law firm to sign off, from risk and liability and contractual standard point of view,” says de Fazekas, who also participated in the project. While a document may become a set of coded processes in a smart contract, a lawyer will still need to know how to audit each process, to validate the different allocations of risk between the parties, he says.

“That’s why these projects are important to lawyers and to law firms,” says de Fazekas.

While many people associate blockchain with crypto-currency, smart contracts don’t have to use so-called tokens and coins, says ter Haar. Existing tools such as DocuSign or Stripe can also be integrated into smart contracts, she says.

Blockchain technology, like other types of software, can be used by a wide variety of lawyers for tasks such as clearing a settlement of securities trades, verifying identities and protecting privilege, underwriting claims for insurance, patient records for health care or administering royalties in media, ter Haar says.

Technology lawyer Addison Cameron-Huff says that as clients demand more efficiency from their lawyers, blockchain will eventually be adopted. The question, he says, is who will win that business.

“Law firms have enormous domain knowledge that’s just waiting to be incorporated into tech products,” says Cameron-Huff. I can see why firms would want to capture that knowledge for their own advantage, rather than give it away to others.  Canadian firms are not trailblazers in tech. Part of the reason for this is the cost of these sorts of initiatives so it makes sense to pool resources to create new platforms that can then be used to expand the pie.”

Cameron-Huff says lawyers on Bay Street may be looking more toward winning on the global market than beating each other.

“The typical approach of firms is to compete with each other, but in the blockchain industry the typical approach is to work together,” he says.

LAW TIMES

Western Financial Group Acquires Ontario Brokerage EGM Insurance Group

Western Financial Group has furthered its strategic expansion in Ontario with its third brokerage acquisition in the province. Effective May 31, 2019, the EGM Insurance Group based in the Ottawa Valley is part of the Western family.

Diligently serving customers since 1942, EGM and its subsidiaries, MC Carroll Insurance Brokers and Johnston & Mackie Ltd., will join Western’s network — one of the largest and strongest in the country.

With this announcement, EGM Insurance Group will bring its four branches, knowledge of the Ontario market and steadfast dedication to customer service and insurance excellence to Western.

“We’re thrilled to welcome EGM CEO Lisa Edmonds and her team,” Kenny Nicholls, Western’s CEO and president, said. “Our two companies are aligned in that we put our customers and people first.”

“This acquisition offers us further abilities to grow our customer broker model in Ontario,” he said.

Edmonds said joining Western is a great opportunity for the EGM Insurance Group and its customers.

“I am excited to know the strength of Western’s people — their experience, resources and stability — will take us to the next level while allowing us to serve our customers in our local community,” she said.

Western Financial Group Inc.

Western, a diversified insurance services company, is focused on creating security and has provided over one million Canadians the right protection for more than 100 years. Headquartered in High River, Alberta, Western provides personal and business insurance services through 183 locations, its affiliates and a variety of connected channels, with an engaged team of more than 1,800 people. Western is a subsidiary of Trimont Financial Ltd., a subsidiary of The Wawanesa Mutual Insurance Company.

EGM Insurance Group

As a well-established insurance broker network, the EGM Insurance Group has provided insurance services to customers for over 75 years. The firm, which serves residents and businesses in the Petawawa and Pembroke areas, had its start as a family business. To this day, the values of yesterday are the same — community connections are key. EGM brokers offer a wide selection of personal and business insurance products.

SOURCE Western Financial Group

http://www.westernfinancialgroup.net

Genworth MI Canada Inc. Announces Special Dividend

The Board of Directors of Genworth MI Canada Inc. (the “Company“) (TSX: MIC) today announced that it has declared a special dividend of $0.40 per common share, for an aggregate amount of $34 million. This special dividend is to be paid on June 28, 2019, to shareholders of record at the close of business on June 17, 2019.

“As part of our previously announced plan to redeploy capital in excess of organic growth needs and our continued focus on capital efficiency, we are pleased to have completed this special dividend, and our recent share repurchases under our previously announced normal course issuer bid,” said Stuart Levings, President and CEO.

Genworth MI Canada Inc. designates any and all dividends paid or deemed for Canadian federal, provincial or territorial income tax purposes to be paid as “eligible dividends”, unless indicated otherwise in respect of dividends paid subsequent to this notification, and hereby notifies all recipients of such dividends of this designation.

About Genworth MI Canada Inc. 

Genworth MI Canada Inc. (TSX: MIC) through its subsidiary, Genworth Financial Mortgage Insurance Company Canada (“Genworth Canada“), is the largest private residential mortgage insurer in Canada.  The Company provides mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers. Genworth Canada differentiates itself through customer service excellence, innovative processing technology and a robust risk management framework. For more than two decades, Genworth Canada has supported the housing market by providing thought leadership and a focus on the safety and soundness of the mortgage finance system.  As at March 31st, 2019, Genworth Canada had $6.9 billion total assets and $4.1 billion total shareholders’ equity. Find out more at www.genworth.ca.

SOURCE Genworth MI Canada

www.genworth.com

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