Multi-billion fund involving Brookfield, Ottawa and major pensions being discussed, sources say

financialpost.com:

The creation of a multi-billion-dollar investment fund seeded with federal government money and designed to attract additional investments from Canada’s large pension plans is among ideas put forward as former Bank of Canada governor Stephen Poloz pursues his mandate to help Ottawa find ways to direct pension billions into the Canadian economy, according to two sources with knowledge of the proposal.

The sources, who spoke on the condition of anonymity because the talks have not yet been made public, indicate that global investment firm Brookfield Corp. pitched the proposal and could be an investor and possibly manage the fund, with hopes that pooled investment dollars would reach $50 billion.

Since Poloz was appointed in conjunction with last spring’s budget to lead a task force for Finance Minister Chrystia Freeland — an appointment that calmed pension executives put on edge a year earlier when Freeland raised the prospect of pressing the country’s largest pensions to increase their investment commitments in Canada — he has made the rounds talking to institutional investors and inviting thoughts from other interested parties. That is when Brookfield presented the pitch, according to one source.

While some had expected to hear public details about Poloz’s task force findings and next steps by as early as last month, the sources said it was determined that Poloz would present ideas first to Freeland based on what he has heard from a variety of stakeholders. He declined an interview earlier this month, saying he did not wish to jeopardize ongoing conversations with the government, but did not specify what was being discussed.

The idea of a new government-backed fund being managed by one of Canada’s largest institutional