With SVX, the im­pact broad­ens

National Post (Latest Edition) - - FINANCIAL POST - Barry Critch­ley Fi­nan­cial Post bcritch­ley@na­tion­al­post.com

The process for those wish­ing to in­vest and make a so­cial or en­vi­ron­men­tal im­pact and for those seek­ing such in­vest­ments just got a lit­tle eas­ier.

This week, SVX, a reg­is­tered ex­empt mar­ket dealer in the coun­try’s four largest prov­inces that is a non-profit or­ga­ni­za­tion led by Toronto’s MARS Dis­cov­ery District, launched its new eth­i­cal in­vest­ment plat­form. That plat­form, whose long- form name is So­cial Ven­ture Con­nex­ion, is more ad­vanced — and broader — than an ear­lier ver­sion launched in 2013.

“We’re en­abling all Cana­di­ans to in­vest for pos­i­tive im­pact,” said Adam Spence, the founder and chief ex­ec­u­tive of SVX, who re­ferred to the new plat­form, the new ser­vices and the new is­suers as a “game- changer for im­pact in­vest­ing in Canada.”

Spence, 36, whose or­ga­ni­za­tion is sup­ported by the TMX, the On­tario gov­ern­ment, the law firm To­rys LLP and two prom­i­nent foun­da­tions, said SVX can help “un­leash as­sets for in­di­vid­u­als and com­mu­ni­ties with a tremen­dous amount of po­ten­tial.”

SVX, which op­er­ates as an ex­empt mar­ket dealer, says in a press re­lease it’s the only plat­form in Canada fo­cused on of­fer­ing in­vest­ment op­por­tu­ni­ties in com­pa­nies that “aim to do so­cial and en­vi­ron­men­tal good while mak­ing prof­its.” Pre­vi­ously it was only open to ac­cred­ited in­vestors, but it can now cast its net to re­tail in­vestors. Un­der SVX 1.0, about $ 100 mil­lion was raised by about 150 is­suers.

What ex cites Spence about SVX 2.0 is the ad­di­tional fea­tures that have been in­cor­po­rated from SVX 1.0, a plat­form Spence calls a “match­mak­ing data­base.” In essence the new plat­form fa­cil­i­tates fi­nan­cial trans­ac­tions and al­lows SVX to op­er­ate na­tion­ally, while open­ing up op­por­tu­ni­ties for both ac­cred­ited in­vestors and re­tail in­vestors.

In­vest­ments from the av­er­age punter are ac­cepted pro­vided the cam­paign, or par­tic­u­lar in­vest­ment, is el­i­gi­ble, and pro­vided the in­vest­ment is deemed suit­able in terms of risk, re­turn and in­vest­ment ob­jec­tive. “We help in­vestors make good im­pact in­vest­ments by en­sur­ing that it’s a good fit,” Spence said. Both debt and equity in­vest­ments are be­ing of­fered.

Spence is ex­cited about the 10 new i ssuers — in ar­eas rang­ing from re­new­able en­ergy to en­ter­prises em­pow­er­ing new Cana­di­ans — that have joined the plat­form.

The First Na­tions Bank is one new­comer. Founded in Saskatchewan in 1996, the bank has eight full- ser­vice branches and five com­mu­nity bank­ing cen­tres in Abo­rig­i­nal com­mu­ni­ties. Ma­jor­ity Abo­rig­i­nal-owned, the bank has about $ 35 mil­lion of equity cap­i­tal and about $ 500 mill i on in as­sets, of which $330 mil­lion is in loans. ( TD Bank was one of its ear­li­est share­hold­ers and still has a stake of al­most 20 per cent.)

The bank hopes to raise about $7 mil­lion of equity, of which $ 5 mil­lion will come from “tar­geted Abo­rig­i­nal in­vestors, the regional or­ga­ni­za­tions that we typ­i­cally raise our cap­i­tal from through pri­vate place­ments,” chief ex­ec­u­tive Keith Martell said.

The hope is to raise the other $2 mil­lion from “so­cial im­pact in­vestors,” he said. A min­i­mum in­vest­ment of $50,000 is re­quired.

“We have to con­tinue to raise cap­i­tal to drive our growth,” Martell said.

The Im­mi­grant Ac­cess Fund is an­other first- time is­suer on SVX. The IAF has been around since 2003 and sup­ports hun­dreds of im­mi­grants by pro­vid­ing di­rect loans to help pay for the li­cens­ing or train­ing. The av­er­age loan is about $7,000.

So what’s be­hind all the devel­op­ments? For one, reg­u­la­tions around ac­cred­ited in­vest­ments, in essence ex­emp­tions avail­able un­der of­fer­ing mem­o­ran­dums and crowd fund­ing, and that al­low greater re­tail par­tic­i­pa­tion, have changed. Then there’s the fin­tech rev­o­lu­tion and the as­so­ci­ated tech­nol­ogy, which makes it eas­ier to match those with cap­i­tal and those want­ing cap­i­tal. Fi­nally, so­cial im­pact in­vest­ing and re­spon­si­ble in­vest­ing con­tinue to gather new sup­port­ers.

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