Power subsidiary Sagard Holdings is investing US$75 million in the fund, called Sagard Healthcare Royalty Partners. The firm declined to disclose who any of the other investors are. The fund will invest in biopharmaceutical firms and seek to make money off royalties from medical devices and pharmaceuticals. (The Logic)

Talking point: This is part of a broader diversification strategy by Power that includes investments in many of the country’s most prominent fintechs. Last month, Power co-CEOs Paul Desmarais Jr. and André Desmarais announced they were stepping down, and the firm is looking at removing its subsidiary, Power Financial, from the TSX. Power will have plenty of competition in the healthtech space. In November 2019, Montreal-based Amplitude Ventures announced a $200-million fund. The federal government is also investing $20 million in the space. Sagard Healthcare Royalty Partners has made one investment so far at just US$31 million, so it’s got plenty of money still at play, and is also keeping the fund open through 2020 for any new investors that want to participate.

Vice-president Paul Desmarais III, scion of the family that founded Power, believes the continent’s sizeable markets and favourable regulatory regimes are fertile territory for the nearly century-old company. (La Presse)

Talking point: In a speech touting Power’s investments, Desmarais III suggested Portag3 Ventures, the company’s early-stage fintech investment firm with some $427 million at its disposal through its second fund, is looking to expand its European holdings. Such expansions would be a major move for the younger Desmarais, whose father and uncle recently stepped down as co-CEOs of Power—and who, given his education and pedigree, some observers believe is destined to take the top job one day. The 37-year-old has been increasingly critical of the fees charged by Canada’s big banks—and for regulations that he said stymie fintech development in the country.

The departure of brothers André and Paul Jr. after nearly a quarter-century paves the way for Jeffrey Orr to take the helm. Previously the CEO of Power Financial Corporation, he is the first non-family member to become CEO of the Montreal-based multinational. (The Logic)

Talking point: The company said the shuffle was part of a simplification of Power’s corporate structure, which would see the main company buy out Power Financial. Yet the elimination of the company’s dual-holding structure, along with Orr’s elevation to the CEO’s office, is recognition that investors have long criticized Power’s bulky governance. (Indeed, shares jumped over eight per cent on the news.) Paul Jr. and André aren’t straying too far, however; the sexagenarian brothers become chairman and deputy chairman, respectively, and the family is investing new capital in Power to ensure it remains in control.

Portag3 Ventures, a VC firm controlled by Power, intends to invest half the funds in North America, 40 per cent in Europe and 10 per cent elsewhere. (The Logic)

Talking point: In 2016, Portag3 created a fintech fund backed exclusively by firms associated with Power. This new fund brought in money from over 20 investors, including the Public Sector Pension Investment Board and the Caisse de dépôt et placement du Québec. In August, The Logic reported the Caisse was planning a $2-billion fund focused on “disruptive technologies.” International firms Aviva France, Israel-based Harel Insurance & Finance and Silicon Valley-based NSV Wolf Capital also invested. Power was an early investor in many of the most prominent Canadian fintechs, including League, Clearbanc, Wave and Wealthsimple. In May, The Logic reported Power had an 88.6 per cent voting interest in the last firm. With its new fund, Portag3 will limit itself to ownership stakes of 10 to 20 per cent.

Canadians pay an average of $159 in bank charges a year, according to a study from Koho, a Power Corporation portfolio company. Paul Desmarais III, senior vice-president of Power Financial and Power Corp., called on banks to be more transparent, saying consumers had a right to know what fees they’re paying. (Bloomberg)

Talking point: Desmarais is speaking from self-interest—Power Corp. and its venture fund Portag3 compete with banks through their fintech investments. The Montreal-headquartered company has also advocated for open-banking rules. Open banking would push banks to share more product and service information, allowing consumers to better compare them, Portag3 said in its submission to the federal finance department, which is holding consultations on the subject. They would make it easier for consumers to share their financial data with third parties, allowing Power Corp.’s fintechs to offer more targeted services. Power has a controlling stake in Toronto-based investing platform Wealthsimple, and has backed loyalty startup Drop, as well as Koho, which offers app-based accounts.

The Montreal-based financial services giant launched Sagard Healthcare Royalty Partners to invest in pharmaceutical intellectual property (IP). The new fund will be led by David MacNaughtan (not to be confused with Canada’s U.S. ambassador, David MacNaughton), who previously held a similar role at the Canada Pension Plan Investment Board. (Globe and Mail)

Talking point: Power Corp. capital mostly comes from its insurance businesses, but recently some of its subsidiaries have been acting as venture capital and private equity firms in IP-focused industries, particularly the technology sector. Through group companies, Power has controlling stakes in fintech startup Wealthsimple, and LED firm Lumenpulse. The group’s diversification into tech has been spearheaded by founding family scion Paul Desmarais III, who has a board or executive role at Power-backed VC firm Diagram, fintech fund Portag3 Ventures and Sagard Holdings, the new pharma fund’s parent company.

The robo-adviser fintech increased its AUA by over $900 million in the first three months of 2019. Over the same period, Power Financial and its subsidiaries invested an additional $30 million, bringing the firm’s total voting interest in Wealthsimple up to 88.6 per cent. (The Logic)

Talking point: Wealthsimple is growing, in part, because of its new offerings like Wealthsimple Invest, Wealthsimple Save, Wealthsimple Trade, Wealthsimple for Advisors and Wealthsimple for Work. Earlier this month, CEO Michael Katchen spoke with David about the company’s push for open banking in Canada. The same day, the firm launched a foundation to help one million low-income children save for school. All these new offerings—not to mention the marketing spend accompanying them—require a fair bit of cash. Power Financial is providing that money. So far, the firm has invested $238 million in the fintech.

Clarification: This story has been updated to clarify Power Financial’s 88.6 per cent voting interest.

The accounts come with no monthly or low-balance fees. Wealthsimple will also roll out ATM fee reimbursements, foreign-exchange-transaction fees and a tungsten metal card with the accounts. (The Logic)

Talking point: Today’s move is a challenge to Canada’s big banks. In its press release, Wealthsimple highlights how much more money would accrue at a 2.4 per cent interest rate compared to high-interest savings or traditional chequing accounts from other institutions. At the same time, however, this chequing account is only possible because Wealthsimple has made a deal with two of Canada’s Big Six banks to actually hold the money, as the company does not have a banking licence. Keeping banks happy while trying to take their customers isn’t the only tightrope to walk for Wealthsimple: it’s heavily backed by financial services giant Power Corporation, but so is Koho, which already offers a bank account.