Re: Canadian Labour Sponsored Investment Funds

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

Dear Deb

Thanks for the info which although brief reinforces my instincts that they
do not represent a meaningful solution to the problem of either creating
new capitalists or connecting capitalists in an operational way with their
investments.

Indeed, their mutual fund like character would reinforce what Peter Drucker
describes as "pension fund socialism", Louis Kelso might call "sterilized
capitalism" and which I describe as "negligent capitalism".  Negligent
because there is a negative incentive for fund managers to spend time and
money making directors and their firms accountable to society let alone to
their stakeholders!

The main objective of the CLSIFs seems to be to re-direct funds back to the
community from which the money is contributed.  No doubt a worthwhile if
limited objective but not a model for us as seek to create new capitalists.
 Let us not get distracted by looking into this "rabbit hole" or be put off
by Bob Stumberg's concerns which I suspect are over legalistic and
subervient to the existing rules which we need to change.

Regards

Shann

At 03:33 PM 27/1/2000 , Deborah Groan Olson wrote:
>Dear Homesteaders:
>
>       I am forwarding this material about Canadian Labor Sponsored Investment
>Funds (LSIFs) from Joan Stockinger. Joan was the CFO of the Crocus Fund in
>Manitoba for many years, and is a member of the COG Executive Board.
>Another source of information about the Quebec Fund is its  founding chair
>and current information officer Fernand Daoust<fdaoust@fondsftq.com>. Your
>best bet for a quick reply from him is to write in French.
>
>Deb Olson
>
>Deborah -- 
>FYI I did get the email and the interim report which I have not yet read, but 
>is readable, and will get back to you ASAP if I have comments.
>
>Deborah and Dan ---
>Re information about labour sponsored funds (LSIF):
>There are about 25 in Canada, most in Ontario.
>Crocus Fund in Manitoba is the only one with explicit worker ownership 
>provisions with regard to its investee companies.
>First Ontario (quite small) has some emphasis too.
>Neither at this time have Web sites.
>
>All the LSIF Funds share a "capital retention" focus.  All involve the 
>gathering of capital from many individuals (like mutual funds) and all have 
>requirements to reinvest in their community.  Most are provincially  based 
>(the investment requirement applies to a province)  A few are national (the 
>investment requirement applies across Canada) (but remember Canada is smaller 
>than our larger states in population -- about 30 Million people.)   
>
>Thus all the Funds end up building/spreading capital ownership in local 
>business, in a community, in the form of mutual fund holdings.  There are 
>tens of thousands of Canadian investors at this time.  And billions under 
>management (5 billion+)  In this way, the Funds, even without an employee 
>ownership objective in their investee companies, do further the broader goal 
>of community capital ownership.
>
>The following Funds have WEB sites which might be of interest to COGS:
>
>Quebec Solidarity Fund
>web site:  http://www.fondsftq.com
>There is both an English and French version (you have to click on it, it is 
>obvious.)
>This was the first of the Funds; it has strong labour support/involvement; it 
>is strongly provincial in its development focus.  There is good information 
>about the philosophy, governing principles and origins the funds in the 
>section "About the Fund" and "Background".  The "Statistics" section is 
>impressive -- the amount of capital gathered for local investment cannot fail 
>to impress.  (Quebec has a population of about 7 Million, I think).
>
>Working Opportunity Fund
>British Columbia (western most province of Canada)
>html://www.wofund.com
>
>There is a jazzy site designed to appeal to investors and the financial 
>community.   There is good background information for COGS and interested 
>parties in the "FAQS" section -- frequently asked questions.  
>
>Hope this is useful and you can post some of it.
>Next I will find some more information about Crocus Fund to "upload" for you. 
> I will need to get approval from Sherman/Crocus for anything not in the 
>public domain.  I don't anticipate this being a problem; (but must do as I am 
>no longer working there, and it is a public company).
>
>I will try and put together a brief (1-2 page) summary of the LSIF situation, 
>capturing what might  be interesting to the COGS community.
>
>Sorry this has taken so long.
>
>Joan
>
>
>
>Attorney Deborah Groban Olson
>Chair
>Captial Ownership Group
>c/o Shared Equity Strategies, Inc.
>3163 Penobscot Bldg.
>645 Griswold St.
>Detroit, MI 48226
>(ph) 313/ 331-7821  or 964-2460
>(f) 313/ 331-2567     or 964-4065
>
>dgo@EsopLaw.com
>www.EsopLaw.com

Shann Turnbull
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