Desjardins launches $120M investment fund

Seen as stepping stone to access European markets

Desjardins is solidifying a partnership with French private-equity firm Groupe Siparex.

Desjardins Capital and Siparex — along with Export Development Canada and Bpifrance, a French public investment bank — are launching a new $120-million investment fund aimed at helping Quebec-based businesses expand to France, as well as help French businesses expand to Quebec.

One of the goals of the fund, announced on Wednesday evening, is for Quebec businesses to use France as stepping stone to access European markets and for French businesses to be able to enter the North American market through Quebec.

Luc Ménard, the COO of Desjardins Capital, said there’s clear demand from entrepreneurs in Quebec who want support as they look overseas.

“They’re used to going south, they’re used to going into the U.S. market, but for them to attack the European market, it’s quite a challenge,” he said.

And European markets are starting to become more appealing for many local entrepreneurs.

It’s unclear what the trading relationship between Canada and the U.S. will look like during the next

We feel that Europe is a place right now that wants to do business with Canada.

few quarters, said Guy Cormier, president and CEO of the Desjardins Group, while the Comprehensive Economic and Trade Agreement, a free trade deal between Canada and Europe, which started to come into effect in September, has opened up that market.

“When you look at what’s happening in France right now, when you look at Germany, when you look at Great Britain, I know they have their own issues, but the economy is quite, quite good there and there’s a lot of opportunities for our businesses,” Cormier said. “We feel that Europe is a place right now that wants to do business with Canada.”

The Transatlantic Fund will be jointly administered by Siparex and Desjardins, with each organization sending a representative to the other’s country to help identify candidates for investment.

While all four partners are bringing money to the table, Cormier said entrepreneurs aren’t just looking for capital, they ’re also looking for contacts in Europe and to access existing networks, something that comes with a local partner.

Siparex also provides an understanding of the European marketplace and regulatory environment, he said.

French businesses are increasingly interested in entering the North American market, said Bertrand Rambaud, the president of the Siparex Group and, in large part, because of the shared language, entering Quebec is the easiest way to do that.

One thing that sets the new fund apart, he said, is the sharing of resources, the fact that there will be someone from Quebec as part of the team in France, and vice versa, brings an additional level of insight. “It’s very important,” he said. The fund is the first capital committees part of the partnership between Desjardins and Siparex, formed in October.

While the fund won’t target specific industries, Ménard said it will target companies with revenue between $20 million and a few hundred million.