Carney’s investment summit attracted ‘all the right people.’ Will it bear fruit?

A handful of the world’s top investors made the same confession to John Graham at the Canada Investment Summit.

Mr. Graham is chief executive officer of the country’s largest pension fund, the Canada Pension Plan Investment Board, a household name in global finance with $864-billion to invest. And he had a prominent role, as a co-organizer of the summit, in playing host to the world’s top money managers for two days in Toronto this past week.

In private conversations, major global investment leaders praised the event to him and then, in the same breath, shared that “this is the very first time they have stepped foot in Canada,” Mr. Graham said in an interview.

“These are people who’ve been global investors for 30 years,” he added, driving the point home. One of them lives in New York.

That same admission, which Mr. Graham heard a half-dozen times as he roamed the summit’s sidelines, underscores the rare opening the event provided to change the minds of hundreds of global CEOs at once about Canada as a place to invest. And it shows the steep challenge the country faces to truly get in the game.

The two-day summit attracted about 250 leading financial CEOs, senior executives and Canadian political leaders. They formed a dense cluster of financial firepower – about $120-trillion in assets between them – around Toronto’s Four Seasons hotel on Monday and Tuesday. Roughly 80 side events were scattered around the downtown core.

Time after time, CEOs with enormous influence over the global flow of capital told Canadian politicians and business leaders they were impressed, that Canada is sending the right, investor-friendly signals and that the country’s trajectory has caught their attention.

But they also bluntly reminded those Canadian leaders – on stage, in private, even in conversations with reporters – that what matters from now on is executing the plan. To prove its case, Canada has to deliver more investable deals and a less sluggish regulatory process.

“Frankly, for a very long time, business investment has been slow in Canada in part because these issues around planning, permitting, approvals have impeded private investment,” Shemara Wikramanayake, CEO of Australian financial services giant Macquarie Group Ltd., said in an interview. “And I think the government is really focusing on where and how it’s going to accelerate that.”

One thing that made the summit work was its tight, invitation-only guest list. It was hand-picked by Prime Minister Mark Carney and a small steering committee that included Mr. Graham, Public Sector Pension Investment Board CEO Deborah Orida and Canada’s ambassador to the U.S., Mark Wiseman. Only CEOs and the most senior executives were welcome. More than a few were turned down.

Aside from the event’s speakers, most of the executives weren’t allotted a badge for a plus-one, leaving them without handlers to chaperone them. The Four Seasons lobby was, as a result, a pasture of free-range CEOs winding their way from one meeting to the next and stopping at will for casual chats along the way.

They squeezed into packed elevators together, and were shooed away by rushed political staffers clearing a path for a minister to scrum with reporters. They sidestepped packs of RCMP officers and security guards patrolling the lobbies and sidewalks around Yorkville, and looked vaguely lost trying to get a table at Café Boulud, a French restaurant inside the hotel.

The rarity of being left to their own devices notwithstanding, some of them said the summit felt comparatively intimate and focused, and that made their interactions more meaningful.

“I didn’t feel very overwhelmed by the event, and I think that made it, for me, much more useful than some of the other summits that I go to, where it’s just a lot of people and a lot of noise,” Majid Al Suwaidi, CEO of the United Arab Emirates-based climate fund ALTÉRRA, said in an interview.

He heard the same feedback from a sizeable delegation the UAE sent to the summit, which included “all the right people,” he said.

Multiple CEOs also told The Globe they were impressed with the sense of urgency in discussions they had with federal cabinet ministers, who were giving out their cellphone numbers, offering a direct line to Ottawa.

What are Carney’s next moves after EU meetings and the investment summit? Ask us your questions

With the Toronto International Film Festival also soaking up hotel rooms, private places to talk were in short supply. CEOs crowded into the restaurants and bars at the Four Seasons and the Hazelton Hotel one block to the west. They met in their own hotel rooms. And they gathered on the outdoor patio of Sassafraz, a staple restaurant in the upscale Yorkville neighbourhood, talking over the racket from street-level construction nearby.

At restaurants, they waved away menus and servers offering to take drink orders, content with tap water and mindful that their next 30-minute meeting was fast approaching.

Some global CEOs treated the summit primarily as a chance to meet existing clients and other international investors, and maybe even hunt for a few new ones. But others said they could see their global peers elsewhere, and came with a more specific mission in mind.

Lennart Blecher, chairperson of EQT Real Assets, an arm of US$389-billion Swedish asset manager EQT Group, estimated that 95 per cent of his meetings at the summit were with Canadian counterparts. “Absolutely. Every half an hour we have a new meeting, and mostly with Canadian partners, potential partners,” he said.

Mr. Carney was part of the attraction. In his career as a central bank governor in Canada and Britain, at Goldman Sachs and more recently at Brookfield Asset Management Ltd., he built close relationships with several of the summit’s guests and a reputation as a pragmatic leader who is cool in a crisis.

“People came because it’s Mark Carney asking them,” Mr. Al Suwaidi said.

Annette Mosman, CEO of €639-billion Dutch pension fund APG Group, told a group of reporters she felt “inspired and also energetic because of his leadership.”

Canada’s trade war with the U.S., which escalated rapidly in the days before the summit, and U.S. President Donald Trump’s use of tariffs as a cudgel promised to loom large. But for most of the event it wasn’t a central topic, at least on the surface, except by inference when investors praised Canada’s stability and rule of law, or its goal to expand and vary its economic ties abroad.

Virtually every major U.S. investor who was invited made the trip, and very few dropped out, as some had feared might happen.

The summit drew no obvious reaction from Mr. Trump. In the lead-up, some top executives quietly wondered whether his administration might deliberately do something to distract from the spotlight the event created for Canada.

Many investors were quick to say Canada’s decision to react by reaching out to the world is the sensible one.

“It will be sorted out, I’m absolutely convinced,” EQT’s Mr. Blecher said of the trade war. “This is just temporary.”

But they were equally quick to brush aside the impact of the U.S. administration’s unpredictable record. In one-on-one interviews, when investors were asked if they are more hesitant about the risk and return in making new investments in the U.S. – and whether that gives Canada a relative edge – three global CEOs who manage a combined $1.5-trillion gave the same, succinct answer: No.

Nonetheless, executives are well aware that it can’t hurt to diversify.

“Never count out the U.S.,” Mark Benedetti, the Canadian-born, U.S.-based CEO of French asset manager Ardian said in an interview.

“The U.S. is a big, important market for us. We’re going to keep investing there, keep growing there, and every institutional investor in the world is going to keep doing that,” he said. “But as good stewards of capital, diversification is important.”

Mr. Benedetti was one of several CEOs who spent time with Mr. Carney while they were in Toronto. Macquarie’s Ms. Wikramanayake met with him Monday. And that same day, the Prime Minister had lunch with about a dozen executives, a U.S.-based private equity CEO said.

As the summit unfolded, Mr. Carney made public announcements that seemed tailored to show investors that Canada is already taking concrete steps to address their main pain points. The news was tightly guarded to ensure maximum impact. Even Mr. Graham and Ms. Orida, as co-organizers, weren’t told what the Prime Minister would reveal until the night before, Ms. Orida said in an interview.

In a speech opening the summit on Tuesday, Mr. Carney revealed the productivity mega deduction. The expanded, permanent tax incentive (which, he joked, got its name because Ottawa had already used “super deduction” for a narrower measure announced last year) allows companies to immediately write off the full cost of an array of new capital investments in assets such as mining property, oil and gas pipelines, software, aircraft and vehicles.

A government chart that accompanied the news trumpeted that Canada is now “more tax competitive than the U.S. across all major sectors of the economy.” A day earlier, Ottawa said it will fast-track advance tax rulings for investments above $1-billion to give investors more certainty.

Several investors said the tax measures on their own aren’t likely to make major foreign capital flock to Canada, but the changes reinforce a more pro-investment approach and could help move the needle when they evaluate deals.

In the same speech, Mr. Carney said the government will open up its four largest airports to private investment, raising “tens of billions of dollars of proceeds” through long-term agreements but keeping underlying ownership.

Canada’s largest pension funds have been calling for Ottawa to sell stakes in airports for years, and it was obvious that global investors are interested. Ms. Wikramanayake and Ms. Mosman both predicted that foreign investors will have a chance to make bids.

“Local investors will probably partner and play a role, but the capital needed is going to be huge,” Ms. Wikramanayake said.

Aside from airports, CEOs showed keen interest in investing in digital and energy infrastructure, including data centres and clean energy projects, as well as power transmission and transportation.

Several CEOs said another line that Mr. Carney repeated at the summit had caught their attention. “For projects and supply chains, our standard will be simple: One project, one review, one year,” he said in his Tuesday address.

“I really perked up,” Mr. Al Suwaidi said. “That could be something that would make a big difference.”

Mr. Carney said at a Friday caucus meeting that the government will move forward with legislation to help speed the approval of new federal projects after the House of Commons returns from its summer break on Monday.

Large Canadian banks and pension funds also announced pledges to increase their investment in Canada around the summit, including CPPIB and Brookfield jointly creating a $50-billion Maple Fund. But the flurry of announcements did not include any from major global investors about significant deals or commitments to invest in the country.

Mr. Carney wants to move quickly to make projects ready for investment, and he was expected to meet Friday with the Major Projects Office after returning from Strasbourg, France, where he opened the door to making Canada an “associate member” of the European Union.

The test now will be whether global CEOs and chief investment officers return home and instruct teams to take a harder look at Canadian projects and deals. Canadian-based CEOs said several of their global counterparts acknowledged their exposure to Canada is likely lower than it should be.

One promising sign, CPPIB’s Mr. Graham said, is that the CEOs who were visiting Canada for the first time “always end that conversation with: ‘And I’ll be back.’”