Macquarie Capital Markets Canada has hired Adam Marcus as Senior Vice-President, Debt Capital Markets. Adam was most recently a Principal at Banc of America Merrill Lynch.

Adil Lalani has joined Macquarie Metals and Energy Capital (Canada) Ltd. in Calgary as Vice-President.

First Asset Management has recently hired Rohit Mehta as Vice-President, National Sales Manager. Rohit was previously at Vengrowth Asset Management as the Vice-President, National Sales Manager.

Merrill McHenry has joined BMO Capital Markets as an Associate Analyst, Mining. Merrill was most recently a Consultant, Mining Analyst at Max Capital.

BMO Capital Markets has promoted Dirk Leasure to Head of their Financial Sponsors Group in New York.

Fiera Capital has hired Aaron Duxbury as a Senior Analyst, Canadian Equities. Aaron was previously a Transportation Equity Research Analyst at National Bank Financial. Fiera Capital has also hired Nick Celeli as a Senior Analyst, Foreign Equities. Nick was previously at Bimcor as a Senior Analyst, Canadian Equities.

Versant Partners has recently hired Institutional Equity Sales professional Michael Rayton in Calgary. Michael was most recently at Tristone Capital.

Research Capital has recently hired Media and Technology Research Associate Damian Wojcichowsky.

Scott Lechky has joined AIMCO as an Associate in their Infrastructure group. Scott recently completed his MBA at the Kellogg School of Management in Chicago.

Jim Morris will be joining Scotia Capital in New York as a Managing Director & Head of the U.S. cash Equity trading unit. Previously, Jim was a Managing Director on Goldman Sach’s Equity desk.

MRM

I had the good fortune of attending a luncheon yesterday hosted by law firm BLG. The guest of honour has Ahmad R. Al-Haroun, Minister of Commerce & Industry for Kuwait. He was a very personable and experienced man, just the type that you’d expect to see in power. His four day Canadian trade mission is in full swing, and he has brought along a wide array of highly relevant business leaders in an effort to stimulate trade and investment between our two countries.

Here’s a data point: according to one member of the delegation, Kuwait was $120 billion to invest around the world over the next five years.

Here’s another data point: according to Minister Al-Haroun, of the 120 delegations received by the 30,000 member Kuwait Chamber of Commerce over the past year, none were from Canada.

Although Canada has some highly relevant experience and technology in the very sectors that Kuwait cares about, such as water, mobile, clean tech and energy, not one mission.

After visiting Kuwait last November for this very purpose (see prior post “Gulf Trip: Day Five” December 5-08), I made the point that Canadian companies are missing some great opportunities to boost sales and develop local joint venture opportunities in places like Kuwai. Within a two hour flight, you can reach hundreds of millions of potential customers.

But don’t take my word for it. We now have a high-ranking Kuwaiti cabinet minister in town making a similar point.

Who’s in?

MRM

Your loyal scribe is on the road again. The 2009 Mid-Atlantic Capital Conference is another example of the right way to run a venture capital conference: combine the traditional VC panels and networking stuff with companies pitching their story. The PVCA event in Pittsburgh had the same format, and the benefit of having entrepreneurs around is pretty clear. Good buzz when you mix the two worlds.

The VC panel last night demonstrated something about the U.S. V.C. industry that isn’t all that prevelant in Canada. There’s lots of grey hair around, and not just on middle-aged guys like me. Here’s a snapshot of the “VC Luminary Roundtable”: Fred Beste of the Mid-Atlantic Venture Funds joined the industry in 1968. I was three at the time. John Martinson, Managing Partner of Edison Venture Fund got Edison rolling in 1986. Sherrill Neff is the founding partner of Quaker BioVentures, which started when he left as President of a publicly-traded lifescience company. Dennis Purcell, the senior Managing Partner of Aisling Capital was once a member of the Advisory Council at Harvard Medical School. A stellar group.

Here are some random takeaways from the panel:

Fred Beste:

“My one piece of advice for entrepreneurs is be well introduced [when you're looking for capital]. Otherwise you are guilty until proven innocent. If you come well introduced I’ll spend a lot of time with your business plan trying to determine if we should have a meeting. If you don’t, I’ll be looking for reasons why we shouldn’t.”

“I did a paper for my University students that should for the 25 years leading up to 2003, the annual capital deployed by the U.S. VC industry grew at a compounded rate of 18%. There is no way the number of good companies to invest in grew at the same rate. The industry needs to shrink.”

Dennis Purcell

“The chances of big pharma acquiring a biotech deal is about 1%.”

“Unlike tech VCs who are looking for 5x or 10x, healthcare VCs would often be happy with a 3x.”

“It is unclear right now if the market is paying investors for taking risk.”

John Martinson:

“One of our most successful investments has spawned more than half a dozen senior executives for other portfolio companies. And it made 50 employees millionaires, which paid for a lot of college tuitions for their kids. That’s a fun part of our business.”

Of the 35 investments Edison has made in Pennsylvania, 25 of them accessed the Ben Frankin fund (a gov’t program) at one point in their early growth. It’s proof that state-backed efforts can work.

Sherrill Neff:

“If I don’t think it’s going to be fun to do business with someone, that’s a problem. A key criteria is the feeling I get about the people involved.”

Amen on the last point.

MRM

Technical analysts gave the stock a drubbing last week,. And earlier today, Citibank’s analyst concluded that although the stock was a “buy” last Friday, RIM’s lock on the enterprise market was finally going to crack. This time for real. Time for a “sell” rating.

Over the past decade, RIM’s dominance in the enterprise market was going to be challenged by Palm (think of the Palm 7), Moto’s Q, Nokia’s flavour of the year, and the more recently the iPhone. But that hasn’t stopped RIM’s impressive revenue growth.

That could all change, but we’ve seen this movie before.

If the stock gets much lower, this most recent crisis of confidence will present exactly the same buying opportunity as January 2008, July 2006, March 2005, September 2002, September 2001, May 2001…to name just a few.

MRM
(disclosure - I own RIM)

This week-end has definitely been one where on the health side of things there were many more tricks than treats.

I. Shortages

It is now official…despite previous assurances to the contrary - the country has a significant shortage of H1N1 vaccine (whether plain or adjuvanted)….to the point that today Dr David Butler-Jones = Canada’s Chief Medical Officer has indicated that it likely be Christmas before everyone who wants to be vaccinated will be inoculated.

By then…likely the second wave of H1N1 will be on its last legs.

II Who goes first? Priority groups

In order to deal with this “unexpected” shortage of vaccine…a list of high priority groups has been established…(who goes first) is now being enforced…as previously it was whoever was in line got the jab.

These are :

1. Pregnant women

2. Children > 6 months but < than 5 years old.

3. Health care workers.

4. People younger than 65 with chronic health conditions........ (if you are > than 65 you likely have some immunity to this virus that you have acquired during your life time. )

5.Those who live with or care for vulnerable people.

6. Infants younger than 6 months old.

III Distribution

Today’s announcement that the vaccine is being distributed to doctor’s offices should be viewed in context.

It is being provided to 100 offices (there are 4,000 in the GTA)…and remember that the public flu clinics have run short…and have been running at reduced capacity. Not one public flu clinic was open today in Toronto…Hmmm

We are back to the basic fact that there is not enough vaccine to go around.

IV Remember these three things

1. Not all Influenza Like Illness (ILI) is the flu. Could be just a bad cold. (Refer to previous email…. “Is it just the common cold or the flu?”) - e-mail to follow….

2. “Most cases of H1N1 are mild; most people recover without medical treatment.” WHO

3. “Stay Calm Carry On”….King George VI 1939.

Or in 2009 parlance…Get A Grip!!

To follow now… my commentary on an article which appeared October 29th in the Toronto Sun.

“Shots Coming Too Late” by Michele Mandel Toronto Sun, Sunday October 29,2009

EVALUATING RISK

This is what the H1N1 scare is all about.

In this article mention is made of Dr. Richard Schabas’ observations…ie an evidence based numeric perspective.

This is the sensible way of evaluating risk rather than out of fear (the “amygdala hijack”)

Paraphrasing Dr Schabas …there is an individual risk of a child dying from H1N1 of about 1 in 250,000. And that same child is 20 times more likely die in a motor vehicle crash than they are to die of H1N1.

This is the most important part of the article….and we need much, much, much more of this kind of rational input to the public discussion.

Numbers and rational thinking…the best medicine for irrational fear the current “Chicken Little…The sky is falling” scenario aka “H1N1 Psychosis”.

MRM

Here is the link to his piece.

AO

He gets to open up the newspaper today, read about the challenges at Globalive, and wait for the phone to ring. One easy way for the Globalive wireless team to reduce their foreign content level is to bring in a domestic pension plan as a new equity partner to get Egypt’s Orascom below the 50% ownership threshold.

But the more synergistic way to pull that off is to merely buy Mr. Bitove’s DAVE Wireless and merge it into Globalive in an equity swap deal. The CRTC’s concern about foreign control would likely be solved in a flash.

Just a thought.

MRM

It was just a few hours ago that I had to pay 50 cents to enter a stretch of road near Reston, Virginia. And then another 50 cents to exit some 15 minutes later. Most of my fellow commuters were fixed up with electronic tolling passes, but my Ontario-made Malibu rental was not so configured. It didn’t take a minute to pony up, even if you don’t have exact change. Even in the Land of the Free, driving on a highway isn’t.

User pays. How simple. How smart.

As the City of Toronto tries in vain to get its arms around yet another budget deficit, I read in my morning newspaper that the plan is to “cut 5%” from every departmental budget. Surely there must be 5% of fat in any particular bucket, but life in government is never so easy.

The federal government tried to do something similar circa 1992, and then Government House Leader Harvie Andre was looking for 10% cuts across the board. The Cabinet Ops committee was getting up a head of steam; it was a recession after all, and the deficit was far too large for anyone’s comfort. I pointed out that a 10% cut would have a bunch of unintended consequences: 10% out of a grant to the volunteer Civil Air Search and Rescue Association would mean they could fly 10% fewer missions in Thunder Bay, for example. Which would mean that DND would need to send up a search and rescue helicopter or plane from Trenton to fill in the gap. A very expensive budget cut that would actually cost money in the end. (They pulled that one from the list.)

Torontonians will soon learn which budgets can spare a 5% belt-tightening: police and fire services seem like very inappropriate places to cut, and welfare costs aren’t something that one can fiddle with. The weakest in society have been dealt a bad enough hand as it is.

So, what to do?

Tolls on the DVP and Gardiner Expressway (see prior posts “Bring on the toll roads” Sept 10-07 and “Globe columnist joins the toll road gang” Nov 25-07), that’s what! Two tiers: one price for those who live in the “M” postal code, and a higher one for the rest. Whether you drive in Florida, California, New Jersey or Virginia, tolls are a natural way to help pay for the cost of maintaining road infrastructure. Even in New Brunswick.

A home near ours is full of 20-somethings who appear to be in some bizarre stage in life where no job is required to get by, and yet the driveway is home to five different eurpoean-made cars. The property taxes on that house are the same, whether or not these residents drive or take the TTC to their next all night booze-up. They aren’t paying their fair share of the upkeep and policing of Toronto’s two major roadways. Nor are the good people of Aurora, Thornhill, Richmond Hill, Markham, Mississauga, Burlington, Georgetown, Oakville, etc. who choose to drive to work each day on these very roadways.

Why are the residential and commercial property taxes of these regions lower than Toronto’s? In part, because Torontonians cover the cost of the road that the good people of leafy Old Oakville need to get to their jobs in the urban core; or tonight’s Raptors home-opener. The Nightingale performance at the COC. Or a U2 concert at the Rogers Centre….

If tolls reduce traffic, all the better.

Bury the Gardiner? Maybe someday. But it can never happen without a meaningful way to get the private sector to pay for the billions involved; the 407 is proof that we can succeed at this.

The free ride must end. 5% budget cuts isn’t leadership.

MRM

With the contraction in the North American debt markets, it is a great time to launch in a new market. Particularly if you’ve got a stable funding source (such as pension fund capital). But the range of choices and flavours between capital providers makes it tough for entrepreneurs to access the right funding path for their own situation. Here are the five questions to ask your venture debt lender…before you even get into terms and conditions:

1. What is your funding source? Hedge funds, public market equity, pension fund / life insurance capital, government vehicle, bank warehouse lines, a combo? Is the capital permanent? When do you next have to renew your funding deals?

2. Is your fund levered? Do you rely on a bank line or similar debt facility to fund transactions?

3. Who is on your investment committee? Are any of your lenders / investors on the investment committee (if you have any lenders involved in the ultimate funding of your deals)? Is the investment committee aware of your deals before term sheets are signed, or do they first come to learn about a deal once it is formally presented for funding approval?

4. Do you outsource any of your due diligence? Is that going to cost extra or is it built into your stated deal fees?

5. If you rely on “material adverse change” clauses in lieu of a financial covenant in the loan document, give me an example of what would have to happen in our business for that to kick in? Would you put that in writing?

There are plenty of ways to diligence your capital provider. Calling VCs that they’ve worked with in the past is a great place to start, yet few ever take that step. This list doesn’t replace that type of “worm’s eye” view, but it’s essential that CFOs know a little bit about the venture debt firm’s plumbing before pulling the trigger.

Unlike the VC world, not everyone in the venture debt business controls their own capital. And some have to borrow the capital themselves from a debt syndicate before being able to advance funds to your business. That matters if you’ve got a multi-year deal and yet their funding source is up for renewal annually, for example.

For all the energy that goes into doing a series of reference checks before hiring a new employee, you can’t go wrong by better understanding these key questions when searching for new capital.

MRM

If you’d like to submit your application, click here.

Two of my partners, Mark McQueen and Mark Usher of Wellington Financial, will be in attendance.  We are always watching for great up and coming companies, not to mention the many other Venture Capital and Private Equity investors that will in attendance.

These are just a few of the scheduled speakers:

Paul Kedrosky, Kauffman Foundation

Duncan Stewart, Deloitte

Chris Arsenault, iNovia

Claudia Fan Munce, IBM Venture Capital

Chris Wormald, RIM

& Sir Terry Matthews, March Networks 

AO