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Found 13 results

  1. Canadian Investor Bets on a Montreal Revival Cadillac Fairview Wants to Expand City's Business Center to the South By DAVID GEORGE-COSH Nov. 5, 2013 6:11 p.m. ET For more than two decades, Montreal was one of the sleepiest office markets in Canada, seeing no new private development as cities such as Toronto and energy-rich Calgary added millions of square feet of new space. Now, as Canadian investors step up real-estate investment throughout the world, a company owned by one of Canada's largest pension funds is looking to shake things up. Cadillac Fairview Corp., a unit of Ontario Teachers' Pension Plan, wants to expand the city's business center to the south with a planned 1.9 billion Canadian dollars ($1.82 billion) development next to the Bell Centre, where the National Hockey League's Montreal Canadiens play. The company earlier this year broke ground on the first building on the 9.2 acre site, named the Deloitte Tower after the professional-services firm that it lured from Montreal's traditional downtown. Owners of office buildings in Montreal's core dismiss the competitive threat, citing the lack of retail and transportation in the Deloitte Tower area. "I don't think that people who went to that location will be happy," says Bill Tresham, president of global investments at Ivanhoé Cambridge Inc., which owns the Place Ville Marie office complex that Deloitte is vacating. But Cadillac Fairview executives say businesses will be attracted to the tower's modern workspaces, energy efficiency and the civic square and skating rink in the complex modeled on New York's Rockefeller Center. "That's where we feel the growth is," says Sal Iacono, Cadillac's senior vice president for development in Eastern Canada. Developers in other cities have had mixed results when they have tried to build new business districts to compete with traditional downtowns. London's Canary Wharf development was forced to seek bankruptcy protection in its early years, although it eventually turned into a success. The Fan Pier project in Boston finally has gained traction after years of delay. The Cadillac Fairview development is partly a sign that Montreal has absorbed a glut of space that has hung over its office market for years. Its third-quarter vacancy rate for top-quality space downtown was 5.4%, compared with 9.4% in the third quarter of 2010, according to Cushman & Wakefield Inc. But the project also is a sign of the increasing appetite that Canadian investors have for real-estate risk as the world slowly recovers from the downturn. Canadian investors are on track to purchase at least US$15.6 billion of commercial real estate world-wide in 2013, up from US$14.5 billion in 2012, and a postcrash record, according to Real Capital Analytics Much of the interest is coming from Canadian pension funds, which have more of an appetite for risk than U.S. and European institutions because Canadian property wasn't hurt as badly by the downturn, experts say. The Canada Pension Plan Investment Board, the country's largest pension fund, allocated 11.1% of its assets to real estate, for a total of C$20.9 billion, in the first quarter of fiscal 2014. That is up from 10.7% in the first quarter of fiscal 2013, for a total of C$17.7 billion. Ontario Teachers' Pension Plan has been aggressive in several other sectors as it tries to shore up its funding deficit amid stubbornly low interest rates. The fund last month acquired Busy Bees Nursery Group, the largest child-care provider in the United Kingdom, for an undisclosed sum, while contributing US$500 million to Hudson's Bay Co.'s purchase of Saks Fifth Avenue for US$2.9 billion in July. Over the past year, Teachers' also has made investments in Australian telecom companies, oil assets in Saskatchewan and a supplier of outdoor sports-storage systems. Cadillac Fairview's real-estate portfolio increased to C$16.9 billion at the end of 2012, the last period for which data is available, up from C$15 billion in 2011. Montreal has a population of 1.65 million and its business sector, which relies heavily on aerospace, information technology, pharmaceuticals and tourism, remained relatively healthy during the downturn. The last commercial office buildings in its modern office district were completed by private developers in 1992. Nearly 20% of the city's office inventory was built before 1960, more than in other large Canadian cities, according to Cushman & Wakefield. Other pension funds also are making new investments in Montreal's office market, though they are focusing on core properties. Ivanhoé Cambridge, an arm of Quebec-based pension fund Caisse de dépot et placement du Québec, spent more than C$400 million in August to acquire full control of the Place Ville Marie office complex, and is planning a C$100 million upgrade. Cadillac Fairview began assembling land for its project in 2009 when it acquired Windsor Station, a historic hub that dates to the 19th century. The area is southwest of Old Montreal, the historic section of the city near the St. Lawrence River. But the area has been unappealing to most office-building developers because it lacks many stores, restaurants or other amenities. "No one was interested in developing," Mr. Iacono says. The company has been planning a development including retail, office and residential space since then, but many were skeptical that businesses could be convinced to move outside of the city's traditional business center. That skepticism was damped when Deloitte announced plans to move. Then this year, the Alcan unit of mining giant Rio Tinto said it would move its headquarters to the top eight floors of the 500,000 square-foot tower, increasing its occupancy to 70%. Cadillac Fairview also has started building a 555-unit condo on the site. Eventually, the entire complex will include an additional 4 million square feet of office, retail and residential space as well as public areas. Deloitte executives say the new building—slated to open in 2015—was appealing because of its energy efficiency and green features such as stalls for charging electric cars. "This building is a catalyst for a whole energy for that part of the city," says Sheila Botting, national leader of real estate for Deloitte in Canada.
  2. having recently walked through griffintown from downtown towards verdun i found that while the area is filled with many condo projects most of them look they have been there for quite a while and they all seem to be waiting after one another to 'pop' from the ground ... in the meantime the place still looks awfully desolate and abandoned and you have to think that this has an effect on the health of those projects - it's not like the city lacks any plans for griffintown but don't you think they should be more proactive about it and inject some fund in the neighborhood to help spur the growth of all these residential towers instead of waiting for them to actually get built before they do anything ? chicken and the egg kinda situation now it seems but imo the city should be the first to do actually do something and not the private developers .. after all all these years down the road its the city that will still be collecting tax funds if anything gets built - not the initial investors
  3. Renewable energy dominates this year's Top 100 Projects list - with little help from the Stimulus Fund
  4. Alberta's heritage savings fund hit hard The Canadian Press October 14, 2008 at 4:45 PM EDT Edmonton — Falling stock prices have sliced roughly $1 billion from Alberta's rainy-day savings account. Finance Minister Iris Evans told the legislature that the value of the Heritage Savings Trust Fund has been reduced to $16-billion — a drop of roughly 6 per cent since June. But she says the loss is only on paper because the province isn't selling any of the stocks that have lost value recently. Evans is promising a further update on the heritage fund at a public meeting Thursday in Edmonton and again in the second-quarter fiscal update next month. Premier Ed Stelmach has said there's nearly $8 billion set aside in a separate fund that will be used to maintain government programs at current levels if the economy falters. Mr. Stelmach said last week the province is not immune to current market fluctuations, but is “prepared to weather any storm.”
  5. The truth will set you free... !!! It’s been a little more than a month since the Liberal government of Quebec Premier Philippe Couillard released its belt-tightening budget, and since then everyone from movie producers and doctors to teachers and mayors has griped about the cuts it promises. They shouldn’t be surprised. Couillard campaigned on a pledge to fix Quebec’s “economic fiasco.” But a new report from the C.D. Howe Institute offers a stark reminder of how difficult that task will be. The report, authored by Philip Cross, the former chief economist at Statistics Canada, shows the extent to which the economies of Ontario, Quebec and the Maritimes now rely on public sector versus private sector investment for growth. Condensed version: a whole honking lot. Investment spending refers to money spent on structures, machinery and equipment, and since 2000, the report notes, public sector investment as a share of GDP has nearly doubled in Quebec to almost six per cent. At the same time, business investment—you know, by actual companies—has stagnated at seven per cent. That’s put Quebec near the bottom of the pack, alongside Ontario, and a notch above New Brunswick and Nova Scotia. “Business investment is the lifeblood of economic growth,” Cross wrote in an opinion piece. “It determines what the economy will look like years from now, and how competitive its workers will be.” Of course, to have business investment, you’ve got to have businesses. And that’s where Quebec faces serious problems that run far deeper than any single austerity budget can hope to tackle. In December, Statistics Canada released a largely overlooked research paper that examined the rates at which new businesses have been joining and leaving the marketplace in each province. The creation of new firms and the destruction of old ones, through consolidation or closure, is key to a vibrant economy, bringing in new ideas and innovations and forcing existing businesses to pick up their game. You can probably guess where Quebec ranked, but I’ll tell you anyway. From 2000 to 2009, no province had lower so-called “firm entry” than Quebec. In fact, in the manufacturing, retail, transportation and finance sectors, more companies went away than were created. No other province had that level of “destruction” without the customarily accompanying “creative.” Related: Maybe Harper has slain the separatists The charter may be gone, but Quebec’s identity crisis remains Why Justin Trudeau risks alienating Quebec It gets worse. Another report from a few months ago, the Global Entrepreneurship Monitor, measured the levels of entrepreneurialism across Canada. It did so by looking at the percentage of working-age adults who are either engaged in setting up a business or who own a wage-paying business that’s existed for less than 42 months. On that front, too, Quebec came dead last, with an entrepreneurship rate of 9.6 per cent, compared to 11.9 per cent in Ontario and close to 19 per cent in Alberta. Quebec Source: Global Entrepreneurship Monitor Sylvain Carle, an entrepreneur in Montreal who’s started several companies, recently shared an anecdote with the Montreal Gazette that sums up Quebec’s sluggish start-up culture. While attending a conference at Stanford University, a speaker had asked how many people in the audience of 100 were starting their own companies, and 105 hands went up, since some were multi-preneurs. When Carle asked the same question to a similar-sized audience in Montreal a few weeks later, five hands went up. It doesn’t take an advanced degree in rocketry to know why all this is the case. For decades Quebec businesses have been plagued with repeated bouts of separation anxiety and the constant irritant of the province’s language police. The province punishes businesses with some of the highest taxes in North America, yet it has rung up a $2.4-billion deficit and a debt load equal to half its GDP, the highest in the country. When not arbitrarily overriding the rights of shareholders to protect underperforming Quebec companies, the government has flip-flopped on its attitude toward resource development. In short, it’s an economic environment layered with uncertainty, instability and state interference. For the longest time, the solution from the Quebec government to its stagnant business environment was more Quebec government, in the form of state-sponsored funds doling out cheques to those it deems to be worthy entrepreneurs. Just this past March, the Caisse de dépôt et placement du Québec pension fund, that bastion of economic nationalism, joined with Desjardins Group to create a fund to pump $230 million into small and medium-sized enterprises, having already distributed $190 million to 186 other companies through an earlier fund. And yet the level of business creation is stuck in neutral. This is what Couillard faces. He’s said all the right things about tackling Quebec’s fiscal crisis: “The time for cosmetic changes is gone,” he said in his throne speech in May. “We must act firmly and decisively. And we will.” His far bigger challenge remains to make Quebec a place where entrepreneurs would want to set up shop. The best way he can do that is to get his government out of the way.
  6. Will Quebec be a gas, gas, gas? Fund managers are making big bets on juniors targeting the Utica shale region SHIRLEY WON From Wednesday's Globe and Mail May 28, 2008 at 7:21 AM EDT Quebec may seem like an unlikely hot spot for natural gas exploration, but some investors are digging deeper into unconventional resource prospects in the province. Shares of junior gas explorers targeting the Utica shale region in the St. Lawrence lowlands have surged recently, with some fund managers making big bets on potential winners. "It could be a very large gas discovery for Canada and Quebec," said Eric Sprott, chief executive officer and a manager with Sprott Asset Management Inc. "We probably started [accumulating stock] six months ago, but we went in earnest eight weeks ago." Toronto-based Sprott Asset Management, through several of its funds, holds 14 per cent of Gastem Inc., 15 per cent of Questerre Corp. and 13 per cent of Altai Resources Inc., according to Bloomberg. Forest Oil Corp. The Globe and Mail The Quebec shale play, which involves drilling for gas by fracturing dense rock, focuses on an area south of the St. Lawrence River between Montreal and Quebec City. Interest has grown in the region since April, when Forest Oil Corp., a Denver-based oil and gas company, announced a significant discovery there after testing two vertical wells. Forest Oil said its Quebec assets may hold as much as four trillion cubic feet of gas reserves, and that the Utica shale has similar rock properties to the Barnett shale in Texas - the largest U.S. onshore gas field. Quebec has been known to have natural gas reserves, but advanced horizontal drilling techniques and higher gas prices are now only making the play potentially economically viable, observers say. Forest Oil, which has several junior partners in the region, will drill three horizontal wells in Quebec this summer. It has targeted its first production for next year, and full-scale drilling for 2010. Calgary-based Talisman Energy Inc. also plans to drill in Quebec in late summer. The presence of the majors gives this play more credibility, said Wellington West Capital Markets analyst Kim Page. "Talisman has indicated it is budgeting $100- to $130-million for Quebec," Mr. Page said. "The return opportunity, if this play is commercially viable, is very high." But it is the juniors that "provide the greatest upside potential," when investing, said analyst Vic Vallance of Fraser Mackenzie Ltd. The analyst has a "buy" rating on Gastem and Questerre, saying they have properties in the "sweet spot" of the play. He has no price targets on these juniors because "it's so early stage and speculative." Montreal-based Gastem is partnered with Forest Oil, Questerre and Epsilon Energy Ltd. in the Yamaska permit of the St. Lawrence lowlands. An important catalyst for Gastem's stock could come from results of the drilling of two of Forest Oil's wells this summer, Mr. Vallance said. Forest's third well is in partnership with Junex Inc. Drilling results are also a potential catalyst for the stock of Calgary-based Questerre, which is also partnered with Talisman in its drilling program, Mr. Vallance added. Toronto-based Northern Rivers Capital Management Inc. owns 11 per cent of Gastem through its four funds. "The fact that it is in all the funds reflects how bullish we are," said Alex Ruus, a hedge fund manager with Northern Rivers. Mr. Ruus was on site when Forest Oil began drilling on Gastem's property last summer. "I became quite convinced that there was probably a commercial discovery here." It was Gastem's management that got Forest Oil interested, he added. "Forest Oil is the operator that is driving this [play], going forward." He has scenarios valuing Gastem from $1 to $40 a share, but his target is now more than $10, based on current data. The play is attractive because there is a ready-made local market, as Quebec imports gas from Western Canada, and there is a network of nearby pipelines, he said. "If this thing becomes as big as we think it will, you will see Quebec starting to export natural gas to Ontario, and New York State." Paul MacDonald, with Marvrix Fund Management Inc., sold all of his shares in Junex during their recent rally, but still holds more than 750,000 of its warrants in three Marvrix resource flow-through funds. Mr. MacDonald bought Junex at $1.25 to $1.30 a share, but the stock shot well past his near-term target of $2.25. "With the best-case assumptions, you can see $30 on Junex," he said. "But there are still risks to the downside. ... It's still high risk, high return." http://www.theglobeandmail.com/servlet/story/RTGAM.20080528.wrgas28/BNStory/SpecialEvents2/Quebec/
  7. Environmental study, alignment approved for high speed rail Michael Cabanatuan, Chronicle Staff Writer Wednesday, July 9, 2008 (07-09) 12:55 PDT San Francisco -- The High Speed Rail Authority granted final approval to the Pacheco Pass alignment to the Central Valley, and to the environmental studies supporting it, Tuesday. With that decision, which came on an 8-0 vote, with member T.J. Stapleton absent, the alignment and environmental study for the 800-mile statewide system are complete. The next step is up to the voters, who will decide on Nov. 4 whether to approve a $9.9 billion bond to help fund construction of the system, estimated to cost at least $30 billion. Environmental studies for the rest of the system were completed in 2004 but controversy over which route to use between the Bay Area and Central Valley - the Pacheco Pass or the Altamont Pass - prompted further studies and much debate. The proposed high-speed rail system would whisk travelers from downtown San Francisco to downtown Los Angeles in two and a half hours, and would travel at speeds up to 220 mph. <img src="http://www.intellexual.net/temp/hsr.jpg"> http://www.cahighspeedrail.ca.gov/ this thing is finally coming together! the next step is for voters to approve a $9.9 billion bond to fund the construction of the system. this bond won't increase your taxes.
  8. ``What happens in the next leg down? We obviously have a huge crisis in financial institutions, but the crisis in the economy is just beginning to be felt,'' Bonderman told a private equity conference in Hong Kong today. ``The global recession is likely to be a deep one and a prolonged one, not a V-shape, not a U-shape, more an L-shape one.'' The credit contagion that began with a surge in subprime mortgage delinquencies is driving the U.S., European and Japanese economies toward recession, and prompted China to unveil a $586 billion stimulus package. The International Monetary Fund last week predicted economic contractions next year in the U.S., Japan and the euro region, the first simultaneous recession since the end of World War II. David Rubenstein, the 59-year-old co-founder of Washington- based Carlyle Group, echoed Bonderman's pessimism. Rubenstein said at the Hong Kong conference that the recession will last for at least a year, and that U.S. unemployment may rise as high as 10 percent. U.S. housing prices may have ``a significant way'' to fall because they're still high by historical standards and sliding rents are reducing the allure of home ownership, said Bonderman, whose firm's funds oversee more than $50 billion. Prices `Way High' TPG's fourth buyout fund, launched in 2003, has delivered average annual returns of 31 percent, according to the California Public Employees' Retirement System, an investor in a number of TPG's funds. Home prices in 20 U.S. metropolitan areas slid 17 percent in August as foreclosures rose, according to the S&P/Case-Shiller price index. ``Housing prices are still way high by historical standards,'' Bonderman said.
  9. End of an Era on Wall Street: Goodbye to All That By TIM ARANGO and JULIE CRESWELL Published: October 4, 2008 JUST before midnight 10 days ago, as a financial whirlwind tore through Wall Street, someone filched a 75-pound bronze bust of Harry Poulakakos from the vestibule of his landmark saloon on Hanover Square in Manhattan. Harry Poulakakos at his restaurant, which has been part of the Wall Street culture now being transformed by the financial crisis. “If Wall Street is not active,” he warned, “nothing is active.” Digging into a bowl of beef stroganoff the day after the bust disappeared — it was eventually returned anonymously — Mr. Poulakakos recalled some of the customers who had passed through his doors since he opened his bar, Harry’s, 36 years ago. Ivan Boesky once had a Christmas party there. Michael Milken worked over at 60 Broad. Tom Wolfe immortalized the joint in “The Bonfire of the Vanities.” Mr. Poulakakos says he even got to know Henry M. Paulson Jr., the former Goldman Sachs chief executive and now the Treasury secretary. Mr. Poulakakos, 70, has also seen his share of ups and downs on the Street, including the 1987 stock market crash, when Harry’s filled up at 4 p.m. and stayed open all night. But the upheaval he’s witnessing now — much of Wall Street evaporating in a swift and brutal reordering — is, he said, the worst in decades. “I hope this is going to be over,” he said. “If Wall Street is not active, nothing is active.” Mr. Poulakakos, rest assured, isn’t planning to disappear. But the cultural tableau and the social swirl that once surrounded Harry’s are certainly fading. “It’s the beginning of the end of the era of infatuation with the free market,” said Steve Fraser, author of “Wall Street: America’s Dream Palace,” and a historian. “It’s the end of the era where Wall Street carries high degrees of power and prestige. And it’s the end of the era of conspicuous displays of wealth. We are entering a new chapter in our history.” To be sure, living large and flaunting it are unlikely to exit the American stage, infused as they are in the country’s mojo. But with Congress having approved a $700 billion banking bailout, historians, economists and pundits are also busily debating the ways in which Wall Street’s demise will filter into the popular culture. It’s an era that traces its roots back more than two decades, when suspendered titans first became fodder for books and movies. It’s an era when eager young traders wearing khakis and toting laptops became dot-com millionaires overnight. And it is an era that roared into hyperdrive during the credit boom of the last decade, when M.B.A.’s and mathematicians raked in millions by trading and betting on ever more exotic securities. Over all, the past quarter-century has redefined the notion of wealth. In 1982, the first year of the Forbes 400 list, it took about $159 million in today’s dollars to make the list; this year, the minimum price of entry was $1.3 billion. As finance jockeyed with technology as economic bellwethers, job hunters, fortune seekers and the news media hopped along for the ride. CNBC became must-see TV on trading floors and in hair salons, while people gobbled up stories about private yachts, pricey jets and lavish parties, each one bigger and grander than the last. Finance made enormous and important strides in these years — new ways to parse risk, more opportunities for businesses and individuals to bankroll dreams — but for the average onlooker the industry seemed to be one endless party. In 1989, tongues wagged when the 50th birthday celebration for the financier Saul Steinberg featured live models posing as Old Masters paintings. That bash was outdone last year, when Stephen A. Schwarzman, head of the private equity firm Blackstone, feted guests at a 60th birthday party boasting an estimated price tag of $5 million, video tributes and the singer Rod Stewart. “The money was big in the ’80s, compared to the ’50s, ’60s and ’70s. Now it’s stunning,” said Oliver Stone, who directed the 1987 film “Wall Street” and is the son of a stockbroker. “I thought the ’80s would have been an end to a cycle. I thought there would be a bust. But that’s not what happened.” Now, with jobs, fortunes and investment banks lost, a cultural linchpin seems to be slipping away. “This feels very similar, historically, to 1929 and the emotions that filled the air in the months and years that followed the crash,” Mr. Fraser said. “There is a sense of extraordinary shock and astonishment, which is followed by a sense of rage, outrage and anger directed at the centers of finance.” A WALL STREET hotshot was in a real-estate quandary, and he wanted Barbara Corcoran to help him sort things out. “This is a finance guy making a ton of money and he was trying to decide whether he should sell the country home in Connecticut, the apartment here in the city or the 8,000-square-foot dream home in Oregon that he just finished,” recalled Ms. Corcoran, who has spent years selling high-end luxury properties to New York’s elite. Daintily pulling the shell off a soft-boiled egg at a busy restaurant, she said she had fielded call after call from anxious Wall Streeters trying to decide between signing contracts on multimillion-dollar properties or renegotiating because of the downturn. (Renegotiate, she advises.) Skip to next paragraph Enlarge This Image Mark Lennihan/Associated Press Limos lined up at the Lehman Brothers headquarters, pre-bankruptcy. Enlarge This Image Carl T. Gossett/The New York Times The New York Stock Exchange on New Year’s Eve, 1971, in the innocent days before the Gordon Gekko’s arrived, before the 1987 crash and before the credit crisis tarnished the second Gilded Age. But this particular financier, whom Ms. Corcoran declined to identify, was interested in unloading property so he could time the absolute tippy-top of the real-estate market, not because his wallet had thinned. “He decided to list the country home in Connecticut,” Ms. Corcoran said, shrugging as she bit into her egg. If there has been one thing that has kept pace with the outsize personas on Wall Street, it’s the gigantic paychecks they’ve hauled in. Since the mid-1980s, top traders, bankers, hedge fund managers and private equity gurus have reeled in millions of dollars in rotten years and tens and hundreds of millions — a handful even making billions — while the good times rolled. For instance, Steven A. Cohen, a high-profile hedge fund manager who leads SAC Capital Advisors, spent more than $14 million in 1998 for his 30-room mansion in Greenwich, Conn. Then he spiffed up the place with a basketball court, an indoor pool, an outdoor skating rink — with its own Zamboni — a movie theater and showpieces from the art collection on which he has spent hundreds of millions in recent years. So it’s unlikely that hedge fund stars like Mr. Cohen are headed for the bread lines. Two weeks ago, as Lehman Brothers filed for bankruptcy, Bank of America rescued Merrill Lynch, and regulators and bankers anxiously tried to figure out how to save the Street from itself, the world’s affluent plunked down more than $200 million in a two-day auction in London, snapping up the latest works by the British artist Damien Hirst. Still, some will inevitably downsize. “The yacht is probably the first thing to go,” said Jonathan Beckett, in a telephone interview from Monte Carlo as he attended the annual Monaco Yacht Show last month. Mr. Beckett, the chief executive of Burgess, a yacht broker, said that for the past eight years there have been few sellers in the market. That is starting to change, said Mr. Beckett, who noted that a handful of yachts had been put up for sale, ranging in price from $10 million to $150 million. Even party time has shortened. “In the last couple of weeks, since the bottom fell out of the market, we’ve seen people become more reticent to sign commitments for some expensive venues,” said Joseph Todd St. Cyr, director of Joseph Todd Events, which plans weddings and bar and bat mitzvahs for clients whom he describes as nonshowy, sophisticated Park Avenue types. “I had one client who was ready to book the Plaza for a wedding, but now he wants to know what are his other options and whether the Plaza will back down on its minimum spending requirement, which runs about $80,000 to $100,000 for a prime Saturday night date,” Mr. St. Cyr said. “Bar and bat mitzvahs in this town had become a little bit of a show. There’s a little bit of outdoing the Joneses and the Cohens,” he added, noting that typical parties, if devoid of appearances by N.F.L. superstars or the Black Eyed Peas, range from $150,000 to $400,000. Even though some clients may not have been hurt in the downturn, they simply don’t want to have an overly ostentatious party in this environment, he said. SHOWY homes are also on the block. Joseph M. Gregory, Lehman’s president and chief operating officer who was replaced in June, a couple of months before the firm filed for bankruptcy, listed his oceanfront, 2.5-acre, eight-bedroom Bridgehampton home for $32.5 million this summer. Mr. Gregory could not be reached for comment. While brokers say they have yet to see an avalanche of high-end sales, they do say that upheaval is present in the minds of buyers. Once a hamlet for the moneyed old guard, Greenwich has found itself in recent years overrun by flashy hedge fund and private equity managers. But with the markets in flux, some high-end homes with price tags as high as $3 million to $8 million that sat unsold for six months or longer are now being offered as rentals, said Barbara Wells, a local Realtor. “I had a rental on the market for $11,500 a month. On Monday, we got an offer for $8,500, which we countered with $9,500. They came back with $8,000,” she said. “I told them they were going the wrong way but they said, because of what was happening in the financial markets, this is our new offer. And guess what? The owner accepted it.” Also shocking, she said, is the fact that some of the new homes offered for rent were houses built on spec. In all likelihood, the real estate market could be frozen for the next 6 to 18 months or so as buyers and sellers struggle to reach agreement on prices, Ms. Corcoran said. “The buyers have jumped to the sidelines and the sellers refuse to budge on their prices, completely in a state of disbelief that anything has changed,” she said. Job losses and lower bonuses are likely to hurt sales of apartments in New York, particularly starter abodes like studios, one bedrooms and basic two bedrooms. “The lowest-priced properties are always hit hardest first and recover last,” said Ms. Corcoran, who estimates that 20 to 25 percent of apartment buyers in the city work on Wall Street. “The rich have more wiggle room.” Skip to next paragraph Enlarge This Image Neal Boenzi/The New York Times, top; Marilynn K. Yee/The New York Times Michael R. Milken, top, in 1978, and Ivan F. Boesky, bottom, in 1987. The two men, both of whom went to prison, became symbols of Wall Street’s excesses. Enlarge This Image Janet Durrans for The New York Times The Greenwich, Conn., mansion of Steven A. Cohen. After buying it in 1998, he added amenities befitting a hedge fund king, like an outdoor skating rink. Despite the malaise, she says she sees some hope. “This feels like 1987,” after the stock market crashed, she declared. “It’s not even close to ’73 or ’74, when people used to feel sorry for you if you told them you lived in New York City.” That said, Ms. Corcoran said that data she once compiled showed that apartment prices in New York had peaked in 1988, one year after the ’87 crash, and taken 11 years to recover. Of course, there’s another much-watched barometer of Wall Street buoyancy: traffic at some of the city’s high-end strip clubs. During the heyday of the Wall Street boom in the 1990s, Lincoln Town Cars, Rolls-Royces and Bentleys were often found idling outside places like Scores. Inside, according to people who were present at the time, groups of brokers routinely dropped $50,000 and even $100,000 in a single night. In the “presidential suite” at Scores, with its own wine steward who delivered $3,200 bottles of Champagne, the tabs grew quickly. While dancers may not receive gifts like the ones once lavished upon them — say, a $10,000 line of credit at Bloomingdale’s or a pair of $125,000 earrings — the clubs still appear to be filled with brokers, bankers and foreign businessmen. On a recent night at Rick’s Cabaret in New York, men in suits and ties were in full force. At around 10 p.m. — early for a strip club — 10 of the club’s 11 private rooms on the second floor were booked. “Men will never grow tired of the high-class strip-club experience,” said Lonnie Hanover, a spokesman for Rick’s Cabaret International in New York. Rick’s, which is publicly traded on the Nasdaq and has 19 clubs across the country, even plans to expand. “When times are tough, there is no better form of escapism than a night at a gentlemen’s club,” he added. IN the early 1980s, Mr. Stone (who gave the world Gordon Gekko and the “Greed is good” mantra in “Wall Street”) spent time in Miami doing research for his movie “Scarface” (with its cocaine-snorting gangster Tony Montana). When he returned to New York he noticed a shift in the city’s culture of high finance, a world he was familiar with from his childhood. While Wall Streeters weren’t packing guns, other similarities startled him. “What shocked me was I met all these guys who at a young age were making millions and they were acting like these guys in Miami,” Mr. Stone recalled. “There’s not much difference between Gordon Gekko and Tony Montana.” “Money was worshiped and continues to be worshiped,” Mr. Stone added. “Maybe that will change now.” Adoration of riches is hardly new, however. In the mid- to late 19th century, the Gilded Age — a term Mark Twain coined in 1873 — offered equally ostentatious displays of wealth and a broadening gulf between rich and poor. “In the Gilded Age, they built great, enormous palazzos in Newport that they lived in for six weeks a year,” said the historian John Steele Gordon, whose book, “An Empire of Wealth,” chronicles that era. “During the last 25 years, it’s certainly been a gilded age in the sense that enormous fortunes have been built up in an unprecedented way.” Part of Wall Street’s allure for the young and ambitious was that anyone — regardless of education or breeding — could hit it big and live like a kingpin. Consider, for instance, Jordan Belfort. In 1987, Mr. Belfort, then a down-on-his-luck former meat-and-seafood distributor, was standing outside an apartment building in Bayside, Queens, when a childhood acquaintance who worked on Wall Street pulled up in a Ferrari. “This was a guy who you never would have expected would be making this kind of money,” Mr. Belfort recalled in a recent telephone interview. “I was broke, broke, broke, down to my last $100.” Mr. Belfort hit the Street in the late 1980s, and he recounted his adventure last year in a book called “The Wolf of Wall Street,” which he published after serving almost two years in prison for securities fraud and stock manipulation. He recently finished a second installment, “Catching the Wolf of Wall Street,” to be released in February. When he first struck it rich, he followed a well-trodden path for Wall Street upstarts. “First thing I did was go out and buy a Jaguar,” he said. “Step One is you get the car. Step Two, you get a great watch. Then great restaurants, and then maybe a place in the Hamptons — a summer share with another broker.” Whatever the Street’s excesses, it did offer individuals and institutions reliable, sophisticated and often efficient ways to trade and invest, helping to spread some of the wealth. Markets were democratized as individuals who had never before bought a stock or bond dabbled in investing, even if that meant simply plunking down money in a mutual fund, or participating in their company 401(k) plans. New technologies and the ability to trade stocks cheaply opened the financial doors to more people. As home prices rose, meanwhile, homeowners were enticed to tap into their new wealth through home equity loans and then used that money to pay for their own version of a lavish lifestyle. DESPITE these gains in the middle class, though, the truly wealthy have pulled away from the pack. Not since the late 1920s, just before the 1929 market crash, has there been such a concentration of income among individuals and families in very upper reaches of the income spectrum, according to researchers at the University of California, Berkeley, and the Paris School of Economics. Some say that anger over the yawning wealth divide found traction in the highly charged and polarizing debate in Congress over the bailout bill. Mr. Fraser, the historian, says that anger is informed by the de-industrialization of the American economy in recent decades. Factory closings and the loss of manufacturing jobs that paid decent, middle-class wages coincided with the heady expansion of the financial sector, where compensation soared. “That means that people in Ohio and Pennsylvania have not been living as high on the hog as those on Wall Street,” Mr. Fraser said. “There’s a real sense of anger at that unfairness.” Even if the current crisis leads to a prolonged slowdown, people may still flock to finance jobs. But they may have to recalibrate their expectations. “There’s no question that people on Wall Street are going to make less money,” said Jonathan A. Knee, a Columbia Business School professor and author of “The Accidental Investment Banker.” Like any cultural force concerned about its legacy, the financial world has a custodian of its past. On Wall Street, it can be found at the Museum of American Financial History, just a block from the New York Stock Exchange. Located in a grand space once occupied by the Bank of New York, it features a long timeline charting major market events. The last event it notes is the popping of the dot-com bubble earlier this decade. Robert E. Wright, a financial historian at New York University who is a curator of the museum, said that there were still many unknowns about how recent events would be recalled. “If the economic system shuts down and we go in for a deep recession, it probably is the end of an era,” he said. Hedging its bets, the museum has already started collecting mementos from the current crisis to post on its wall.
  10. Wanted: biotech plan By DAVID CRANE, FreelanceFebruary 19, 2009 Sector in peril. New financing schemes are needed to maintain health of industry vital to Quebec's future New financing schemes are needed to maintain health of biotechnology industry vital to Quebec's future New financing schemes are needed to maintain health of biotechnology industry vital to Quebec's future Photograph by: Chris Schwarz, From Gazette Files Montreal has big ambitions to become a major biomedical centre in North America. The hope is that this will lead to jobs and wealth creation, just as promoting the aerospace industry has done. And it could. There's an obvious reason why. The world is on the verge of a biomedical revolution that will be a source of good jobs and prosperity for those societies that succeed in developing and commercializing the new knowledge. If the 20th century was known for great advances in the physical sciences and engineering, giving us the information and communication technology revolution, the 21st century could very well be the century of the biological revolution. But with all the new knowledge flowing out of universities and research hospitals, there's a huge problem - how to finance the growth of young startups commercializing this new knowledge into viable companies with a steady flow of revenues and profits. Montreal, for example, has dozens of such companies - like Theratechnologies, ConjuChem Biotechnologies, ProMetic Life Sciences, Enobia Pharma, Akela Pharma, Thallion Pharmaceuticals, Haemacure Corp., CryoCath Technologies, Paladin Labs, Ambrilia BioPhage Pharma, MethylGene, Alethia Biotherapeutics, Supratek Pharma, AngioChem and many more. Quite a few have products either now reaching the market or close to commercialization, or have promising projects in the clinical testing pipeline. But they must be able to attract the financing they need to keep on the road to potential success. In Canada today, the biotech industry is at a crucial point. Venture capital funding is drying up and many companies are running out of cash. Promising young companies may have to delay development of promising compounds. Or they could be forced to sell to bigger, usually foreign, players at bargain- basement prices. According to Thomson Reuters, which tracks venture investing in Canada, Montreal-area life-science companies raised only $69.9 million in venture capital last year, compared with $219.4 million in 2007. This year could be even more difficult. According to the Canadian Venture Capital and Private Equity Association, only $1.2 billion in new money for investment by venture firms in all high-tech sectors was raised last year, the lowest level on record since the mid-1990s. This is why we urgently need new financing mechanisms to sustain and grow our own life science companies. This should include a capacity to bring about mergers between young Canadian companies where complementarities exist. The industry had hoped the recent federal budget would help address their problems, but advocacy by groups such as BIOTECanada and the Canadian Venture and Private Equity Association were ignored by the Harper government. BIOTECanada had sought several initiatives. These included a one-time redemption for unused tax losses, limited to the lesser of $20 million or twice a company's annual R&D spending, and an exemption from capital-gains taxes in 2009 and 2010 for investors making new direct investments. Both measures would have required companies to reinvest in Canada. The venture-capital industry had sought creation of a $300-million fund of funds to invest in young companies and changes to the R&D tax incentive. British and U.S. biotech companies are facing many of the same challenges. In Britain, some 20 industry and academic leaders have urged the government to set up a $1.8-billion biotech fund, with half coming from government and half from the private sector. The group also wants a separate $900-million fund to make equity investments of $85 million to $170 million to help a small number of companies become more significant companies. British Prime Minister Gordon Brown has established a task force to follow up on this. The biotech industry is especially hard to finance. Not only are the human body, and disease, quite complex. But biotech development cycles are long and costly - projects can take up to 20 years to become successful and cost between $200 million to $300 million, or more, to bring to market. Few compounds succeed. All of these factors make R&D financing a challenge. But the goal to improve human health is important and the economic rewards can be high. This, though, depends on finding a better financing model if either of these is to be realized in Montreal or elsewhere. David Crane is a Toronto-based writer on innovation and globalization issues. He can be reached at [email protected] © Copyright © The Montreal Gazette
  11. une des plus grandes banques américaines se dirige dangereusement vers une faillite.
  12. Quebec businesses to feel pain Our exports set to slow. But local companies well-equipped to weather storm, experts say PAUL DELEAN, The Gazette Published: 9 hours ago It's shaping up to be a winter of discontent in corporate Quebec. Financial upheaval in the United States, Quebec's largest trading partner, has left a lot of companies feeling pinched and dreading the prospect of a full-fledged recession if the U.S. can't resolve its banking crisis. "Winter will be difficult for small and medium-size businesses that export to the U.S.," said former Caisse de Dépot et Placement executive Michel Nadeau, now director-general of the Institut sur la gouvernance d'organisations privées et publiques. "The U.S. economy is slowing. Clients there are squeezed on the credit front. They'll be buying less and wanting deals from their suppliers. And if there's no resolution of the current (bailout) impasse within the next two weeks, Quebec companies risk being being badly hurt." About 80 per cent of Quebec's exports go to the United States, where the credit crunch has put the brakes on consumer spending and ready lending. Suppliers of wood, automotive, industrial and consumer products were among the first to feel the pain. "For businesses selling to the U.S., it's definitely going to have an effect in terms of the revenues they can generate," said Susan Christoffersen, associate professor at McGill University's Desautels Faculty of Management. "So much of the Canadian economy is correlated with the U.S." Jayson Myers, president of the Canadian Manufacturers and Exporters, said many U.S. clients have stopped paying on time, leaving Canadian suppliers "holding the bag." "There's a lot of real concern (among members)," he said. "Conditions had been tightening for three or four months before all this. There was not a lot of profit margin out there to absorb all these shocks." A couple of factors have helped alleviate the blow so far for Quebec businesses. Most have made adaptations in the past two years to become more productive and efficient to cope with the impact of higher commodity prices and a rapidly rising Canadian dollar. And that same dollar has retreated about 15 per cent from its high, to around 94 cents (U.S.) yesterday, making Quebec exports more competitive. Yvon Bolduc, president and chief executive of the Quebec Federation of Labour's Solidarity Fund, said Quebec companies are better prepared for the current crisis than they were for the one in which the Solidarity Fund was created 25 years ago. "For many years, we were competitive because of the dollar. We surfed on its weakness," he said. Despite the strong loonie and credit markets that were already tighter because of last year's financial debacle, asset-backed commercial paper, the private companies in which the Solidarity Fund is invested actually posted a positive return in the latest fiscal year, Bolduc said. The Solidarity Fund provides companies with capital to help them expand and adapt. At a time when other lenders might be unreceptive, it can be a lifeline. Last year, it provided $730 million to 140 companies. That was $120 million more than it had budgeted, Bolduc said. While exporting companies clearly are most vulnerable to a U.S. pullback, there are also signs of a spending slowdown at home as Canadian consumers grow more cautious. Clothing retailers have seen flat to lower sales in recent quarters, and Canadian housing sales and prices have begun to slip. The Quebec economy figures to get some ongoing lift, however, from the ambitious, multi-year infrastructure-renewal program undertaken by the Charest government. "What we have experienced so far is a banking crisis, not an economic crisis," said Simon Prévost, vice-president (Quebec) of the Canadian Federation of Independent Business. "It could become an economic crisis, but we're not there yet." Prévost said there was actually an increase in business confidence in Quebec in the CFIB's last survey in early September, with oil prices and the dollar both declining, and Canadian financial institutions still eager to lend. "Small business owners didn't see any problems getting money from banks (at that time)," he said. "It's changed a little bit, but it's not a big deal yet." In the same survey, 34 per cent of businesses reported growing demand for their products. Fewer than 10 per cent said demand was down. [email protected]