Quebec’s Caisse Supports Natural Resource SMEs
On June 20, 2013, the Caisse de dépôt et placement du Québec (Caisse) announced the creation of Sodémex Développement. The $250 million Sodémex Développement Fund will allocate investments in the range of $5 to $20 million to developmental Québec companies in the natural resources sector. With the creation of the Sodémex Développement Fund, the Caisse will be active in all stages of natural resource extraction in exploration, development and production. Public investors in Québec have a long history of supporting mining companies in the province. In 1996, the Caisse began actively investing in Québec exploration companies through Sodémex Fund vehicles – also called Société de développement des entreprises minières et d’exploration. Investments in these junior exploration companies were small minority stakes.
The concept of a strategic development fund is not new to the Caisse.
The Sodémex Développement Fund will invest in a variety of structures including debenture, convertible debenture and equity. At times faced with insufficient capital, many Canadian developmental companies in the energy sector that show promise are quickly gobbled up by large corporations or foreign institutional investors.
“The current business climate in the natural resources sector can present attractive long-term investment opportunities,” said Normand Provost, Executive Vice-President, Equity at the Caisse in a press release. “This represents a critical entry point for the Caisse in projects that are in the development stage.”
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