FDI an important Canadian leverage point in upcoming White House Summit

U.S. Gov’t Report: Foreign Direct Investment continues to be a key economic driver for the United States

As officials prepare Canadian Prime Minister Justin Trudeau’s briefing books for his State Visit to Washington later this week, it wouldn’t hurt to beef-up the section regarding the importance of Canadian investment capital to the U.S.A. economy. You’d think that American-based businesses have local access to all of the capital they need, but the Administration of U.S. President Barack Obama feels otherwise. That Canadian institutional investors and private funds invest a large portion of their capital in the U.S. market is often forgotten, and that’s an opportunity for the new Canadian PM to exploit.

In 2011, President Obama signed an Executive Order creating SelectUSA: “in order to support private sector job creation and enhance economic growth by encouraging and supporting business investment in the United States.” Although our firm opened our first U.S.-based office in 2009, preceding the President’s initiative, we’ve worked well with the SelectUSA team and the U.S. Embassy in Ottawa following the agency`s creation.

Over the past few years, Wellington Financial has committed capital to 40 different U.S.-based innovation companies in 13 different States (including D.C.). Not bad breadth for a small firm with offices in Santa Monica, Menlo Park and Toronto. The investment total amounts to approximately $250 million, which was used by U.S. entrepreneurs to create / preserve about 6,000 U.S.-based tech jobs. That may not sound like a lot (0.25%) when compared to the 2.4 million U.S. jobs SelectUSA attributes to FDI provided by firms such as ours, but the fact that these are in the cherished “new economy” means that we’ve had the pleasure of speaking at their conferences, lunching with the indefatigable U.S. Commerce Secretary Penny Pritzker, and so forth. SelectUSA (in conjunction with the local State Dept. folks) also does a decent job of coordinating alliances with State governments, making our lives much more efficient on the GR front.

When you think about the U.S. investments and commensurate job creation by groups such as Birch Hill Equity Partners, Clairvest Group, CPPIB, ONCAP, Oxford Properties, Wellington and so forth, the new government in Ottawa has plenty of material to leverage. The Summit`s media coverage has been about a new environmental partnership, but the Trudeau government shouldn’t miss the chance to remind the Obama Administration that Canadian investors are an important contributor to the President’s FDI results under SelectUSA.

As ZDNet released opined about our Atlanta-based portfolio company Nanolumens:

The United States will never return to its former glory as a manufacturing powerhouse, but there are still areas in which it can distinguish itself — such as a supplier of extremely high-end, high-margin goods.

The Democrats know that a greener economy is only possible if there`s an economy to “green-up.

MRM