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jerryking : eric_reguly   59

SNC-Lavalin’s probable exodus from Canada is a national shame
MARCH 29, 2019 | The Globe and Mail | by ERIC REGULY EUROPEAN BUREAU CHIEF
LONDON.

Head offices abandon Canada in two ways – slowly or abruptly.

The slow approach sees the head office, usually after a foreign takeover, gradually lose relevance, to the point it becomes a branch plant and simply fades from view over several years. The abrupt approach, again usually after a foreign takeover, sees the head office vanish virtually overnight, as Falconbridge did a decade ago after it was snapped up by mining giant Xstrata. SNC-Lavalin Group Inc. has been slowly disappearing from Canada for years. That’s mostly SNC’s fault – it hasn’t won enough work to keep its Canadian headcount intact......SNC’s departure would come as a serious blow to Canada Inc. Since the middle part of the past decade, Canada has lost dozens of head offices as Canadian investors lunged at the prospect of fat takeover premiums. Many, perhaps most, of the foreign companies doing the buying promised to keep the Canadian head office intact. But those assurances proved to be either wildly exaggerated or outright lies.

Among the head offices that have disappeared are Alcan, Dofasco, Inco, Molson and a chunk of the Canadian oil industry. Recently, Goldcorp Inc., Canada’s second-biggest gold producer, accepted a takeover offer from Colorado’s Newmont Mining Corp., meaning that Goldcorp’s Vancouver office faces a serious downgrade.

Aside from the loss of stock market listings, the elimination of large head offices rots the country’s social fabric. Head offices provide high-paying, high-skilled jobs and create an ecosystem of spinoff jobs, from accountants and chefs to limo drivers and lawyers. Head offices bolster the financial services industry, which underwrites the bond and equity offerings and sponsors the arts and charities. When corporate headquarters disappear, so does talent.
Eric_Reguly  exodus  head_offices  sellout_culture  SNC-Lavalin  social_fabric 
march 2019 by jerryking
Another one bites the dust: Goldcorp sale a further example of the hollowing out of Corporate Canada - The Globe and Mail
ERIC REGULY EUROPEAN BUREAU CHIEF
ROME
PUBLISHED JANUARY 14, 2019

Toronto’s Barrick Gold Corp. always wanted to team up with Newmont Mining Corp. of Colorado. Merging the two giants, which have adjoining operations in gold-rich Nevada, would have created an unassailable industry leader and reduced costs by an estimated US$1-billion a year. On paper, it looked like a dream deal. But it never got off the ground, in good part because Barrick founder Peter Munk wanted the new company to stay in Toronto, not move to Denver.

Were he alive today, Mr. Munk – a Canadian patriot who believed in the value of head offices – would be distraught. In the fall, Barrick bought Randgold Resources but handed management control to Randgold’s executives, who promptly gutted Barrick’s Toronto headquarters, leaving the world’s top producer with a mere 65 employees in its echo-chamber offices on Bay Street. The deal was, in effect, a reverse takeover. The new Barrick will be run from the Channel Islands........Toronto still fancies itself the mining capital of the world, a bold claim given that it is now largely devoid of A-team and even B-team players. Barrick was the last miner in Canada that could be considered world class, and it’s fading from view as a Canadian company. All the big base-metal names are gone, bar Teck Resources. Goldcorp is going. Who’s next? Could it be the well-regarded Agnico Eagle Mines (market value $12.4-billion) or B2Gold ($3.7-billion)?

Aside from the loss of their Toronto stock-market listings, the endless elimination of head offices across Canada rots the country’s social fabric. Head offices provide high-paying, high-skilled job opportunities and create an ecosystem of spinoff jobs, from accountants and chefs to limo drivers and lawyers. Head offices bolster the financial-services industry, which underwrites bond and equity sales and sponsors the arts and charities. When head offices disappear, so does talent. If you want a top-level management job in mining, an industry that shaped Canada, forget Toronto. Today, the opportunities are in London, Johannesburg and Melbourne...........In a largely open economy such as Canada’s (banks, big telecoms and media companies are still protected from foreign takeovers), it’s hard to stop head offices from disappearing. The cult of shareholder capitalism produces unsentimental results, such as the eradication of underperforming companies. But Canadian investors and managers have proven time after time that they’re happier to sell rather than build, happy to take a quick buck rather than take a long-term gamble on a double or triple. The cost of doing so is a hollowed-out corporate sector – a branch-plant economy.
Barrick  Corporate_Canada  Eric_Reguly  Goldcorp  head_offices  hollowing_out  Peter_Munk  sellout_culture  social_fabric 
january 2019 by jerryking
The gutting of Barrick Gold – it didn’t have to be this way - The Globe and Mail
ERIC REGULY EUROPEAN BUREAU CHIEF
ROME
PUBLISHED JANUARY 4, 2019

Most big companies Eric Reguly followed – Inco, Falconbridge, Alcan, Dofasco, Molson, Fairmont, Four Seasons, among others – were flogged to foreigners, their head offices downgraded to branch plants or eliminated. ....Canadians were sellers, not builders.....If there was one company that was safe from the takeover onslaught, it was Barrick Gold, I thought......At the time, Barrick was run by its founder, Peter Munk, the Hungarian-born Canadian patriot who wanted to build the world’s biggest gold miner. After achieving that goal, he mused about creating a diversified resources giant, the equivalent of a BHP Billiton or Rio Tinto under the Maple Leaf. But he was too late: By the time he was ready to put the pieces together, in the middle part of the previous decade, all his potential targets, including Inco, had been plucked clean from the Toronto stock market.....
Eric_Reguly  branch_plants  head_offices  hollowing_out  John_Thornton  large_companies  LSE  mining  Peter_Munk  Pierre_Lassonde  sellout_culture  TMX  Barrick  Corporate_Canada 
january 2019 by jerryking
Why traditional retail hasn’t hit rock bottom — yet
October 4, 2017 | The Globe and Mail | ERIC REGULY.
.....it's fashionable—and not wrong—to blame Amazon for most of the retailers' woes, other factors, from stale retail formats to the new anti-stuff movement, are at play too. Put together, the financial and cultural forces battering the retailers seem relentless.

The outlook is so grim that Bespoke Investment Group of Harrison, New York, invented a "Death by Amazon" list of 54 retail stocks that it thought would get whacked by Amazon and other forces conspiring against the sector......Traditional retailing, of course, is not entirely doomed because only the brave or bone-headed would buy some expensive items—diamond earrings, high-end suits, musical instruments, mattresses, Persian carpets, prescription sunglasses—without hands-on examination. And some shoppers, me among them, like the pleasure of propping up independent stores that sell high-quality goods.

But I don't shop much for general merchandise any more, because I am sick of clutter and, with university fees for my kids, don't have the spending power for non-essential items..... blamed shifting consumption patterns for much of the old-style retailers' distress........ blamed shifting consumption patterns for much of the old-style retailers' distress...money spent on smartphones and wireless services is unavailable to be spent on T-shirts and shoes.....middle-class incomes have stagnated, healthcare costs have climbed, and highly leveraged consumers are more interested in paying off debt than buying new TVs. Something had to give, and it was the department stores, whose shares are down by 40% or more in the last year or so (Macy's, J.C. Penney)......Amazon's endless virtual aisles sells Fiat cars in Italy, Nike shoes and and Sears' Kenmore appliances. Amazon recently bought Whole Foods and dropped its prices, which put the mainstream supermarkets into a panic........ 55% of product searches start on Amazon, far more than the 28% that start on search engines. The popularity of Amazon Prime (which provides free, two-day delivery as well as TV and movie video streaming) and the construction of massive warehouses have accelerated its growth. .....captures an estimated 40% of every shopping dollar spent online and is already the second-biggest apparel seller in the U.S., behind Wal-Mart. No wonder the traditional retail sector is in free fall.
And here's another question: As traditional retailers weaken or go out of business, and anchor stores disappear from North America's crazily over-malled shopping geography, can the real estate investment trusts be far behind? Betting against Amazon seems a fool's game.......
Eric_Reguly  retailers  decline  bricks-and-mortar  shifting_tastes  Amazon  REITs  shopping_malls  bankruptcies  department_stores  seismic_shifts  high-quality 
october 2017 by jerryking
Summer reads: Globe writers on the book that changed them - The Globe and Mail
STAFF
THE GLOBE AND MAIL
LAST UPDATED: THURSDAY, JUN. 29, 2017

Eric Reguly - Joseph Heller’s Catch-22
Liz Renzetti - Katherena Vermette’s debut novel, The Break.
Joyita Sengupta - Jhumpa Lahiri’s The Namesake.
Eleanor Davidson - Roald Dahl's Going Solo.
Ian Brown - Nicholson Baker’s U and I: A True Story changed the way I thought about books, writers, writing, reading and what it meant to be honest on the page.
Victor Dwyer - Charlotte Gill's Eating Dirt: Deep Forests, Big Timber, and Life with the Tree-Planting Tribe.
Rosa Saba - Markus Zusak's I Am the Messenger tells the tale of a young man in a stagnant existence whose life is changed by a series of mysterious missions, in which he finds himself helping strangers and eventually helping himself. [You can’t wait for something to happen to you and give your existence meaning. You are the one who will make your life worthwhile.]
books  fiction  Eric_Reguly  Ian_Brown  life-changing  reading  summertime  transformational  writers 
june 2017 by jerryking
How Glencore AG became a giant in the global agriculture trade - The Globe and Mail
ERIC REGULY
ROTTERDAM, NETHERLANDS
THE GLOBE AND MAIL
LAST UPDATED: WEDNESDAY, MAY 03, 2017

Interested in acquisitions, Glencore AG has accumulated an extensive network of grain assets around the world, and has no plans of stopping
Eric_Reguly  Glencore  soybeans  CPPIB  Argentina  ADM  Bunge  Cargill  Louis_Dreyfus  oilseeds  Viterra  agriculture  growth  opportunities  Rotterdam  grains  logistics  storage  transportation  trading  agribusiness  supply_chains  Marc_Rich 
may 2017 by jerryking
Monocle editor-in-chief Tyler Brûlé is a rare believer in print - The Globe and Mail
ERIC REGULY - EUROPEAN BUREAU CHIEF
LONDON — The Globe and Mail
Published Friday, Dec. 23, 2016

Wallpaper was Mr. Brule’s first media success story, even if it was, for him, a financial dud. ...Wallpaper, focused on fashion, design, travel and art and, as does Monocle today, highlighted top-quality products and services as opposed to merely “luxury” offerings in all their potential vulgarity. The magazine was launched in 1996 – “It ran out of money right away” – and Mr. Brûlé sold it to Time Warner (now Time Inc.) a year later. In 1998, Wallpaper started Winkreative, a brand design and strategy agency that, lately, designed the brand image of Toronto’s Union Pearson Express.....Across the street are two trim shops – Trunk Labs and Trunk Clothiers – that sell horrendously expensive travel and clothing items such as the Begg Arran scarf, apparently made from the wool of caviar-fed sheep; yours for €345 (almost $500 Canadian).

On the same street is the little, ship-shape Monocle Café...The Monocle Shop is around the corner. In nearby Paddington, Monocle is experimenting with Kioskafé, a news and coffee shop that sells 300 magazine titles and thousands of print-on-demand titles, including The Globe and Mail.

Mr. Brûlé says the collective revenue for the publishing, agency and retail spreads are about $50-million. “We’re disappointingly small,” he says.
Eric_Reguly  Tyler_Brûlé  Monocle  digital_media  cosmopolitan  stylish  print_journalism  magazines  journalism  entrepreneur  branding  niches  elitism  social_media 
december 2016 by jerryking
Former Xstrata boss Mick Davis a slimmer, trimmer predator - The Globe and Mail
Mar. 13 2015 | The Globe and Mail | by ERIC REGULY - EUROPEAN BUREAU CHIEF
LONDON.

Mick Davis runs X2 Resources, which has 10 employees and zero assets other than $4-billion of investor capital, some of it from Canadian pension funds, sitting idly in the bank.

X2 was launched a year ago and has been shopping for mining assets or operating companies, but has come up short....Mr. Davis is wealthy. He recently donated £1.1-million ($1.5-million) to David Cameron’s Conservative party to support its re-election bid in the May general election. He admits he doesn’t need to launch X2 to support his lifestyle, though he would like to donate more money to his charities. What’s really driving him is the urge to build once again....Xstrata began life in 2001 as a small lump of coal assets discarded by Glencore. Big Mick had emerged as the industry’s premier predator. “What motivates me is to be able to create and build,” he said back then. “If you’re going to be productive in your time in this world, you have to add to it. I have the capability of adding commercially.”....Commodities recovered shortly after the 2008 financial crisis, then went into a long slump that continues today – copper is down more than 15 per cent in the past year, iron ore by 50 per cent. The culprit was not waning demand, Mr. Davis explains; it’s still rising, albeit at a slower pace. Instead, it was epic miscalculation by the corporate captains and the investors who threw money at them. When prices were strong, the biggies invested fortunes in new mines and smelters and all the ports, ships and railways that went with them. These projects were vast, expensive and took many years to build.

All that new production is now hitting the market like a sledgehammer.
Xstrata  Mick_Davis  mining  Glencore  Eric_Reguly  miscalculations  Second_Acts  commodities  private_equity  mergers_&_acquisitions  natural_resources  X2  entrepreneur  privately_held_companies  overcapacity  overexpansion 
march 2015 by jerryking
Former Xstrata CEO raises $2.5-billion for new company - The Globe and Mail
ERIC REGULY
- EUROPE BUSINESS CORRESPONDENT

X2’s goal is to create a mid-tier mining and metals group. The company consists of a small office in central London and five executive partners, all of whom worked with Mr. Davis at Xstrata. They include Trevor Reid, who was Xstrata’s finance director, Thras Moraitis, Andrew Latham and Ian Pearce. Mr. Pearce, of Toronto, was the CEO of Xstrata Nickel, formerly Falconbridge Ltd., the Canadian nickel miner bought by Xstrata in 2006 for about $22-billion (Canadian).

With ample funding in place, X2 is expected to move quickly on the acquisitions front. The company won’t say where it is looking, though the team has intimate knowledge of the mining scene in Australia, Canada and South Africa. Mr. Davis is a South African and was the chief financial officer of Australia’s Billiton before its merger with BHP in 2001.

X2 will consider buying operating companies or assets that are being discarded by the big players such as BHP, Rio Tinto and Anglo American, which overpaid for assets before the 2008 collapse in the belief that the upward commodities cycle was unstoppable. They have taken billions of dollars of writedowns in the past couple of years.

ROME — The Globe and Mail

Published
Monday, Mar. 31 2014,
Mick_Davis  Xstrata  Eric_Reguly  mining  natural_resources  commodities  overpaid  commodities_supercycle 
april 2014 by jerryking
Jobs: optional
March 28, 2014 |Report on Business Magazine |Eric Reguly
Facebook's purchase of WhatsApp - $19 billion for 55 people - shows how technological change and employment growth are becoming uncoupled
Eric_Reguly  Facebook  WhatsApp  digital_economy  productivity  the_Great_Decoupling  technological_change  digitalization 
march 2014 by jerryking
Peter Munk: A mining magnate nears the end of his golden reign - The Globe and Mail
ERIC REGULY - EUROPE BUSINESS CORRESPONDENT

KLOSTERS, SWITZERLAND — The Globe and Mail

Published Saturday, Mar. 15 2014,
Eric_Reguly  Peter_Munk  Glencore  Xstrata  John_Thornton  Canada  Barrick  mining  moguls  entrepreneur  commodities 
march 2014 by jerryking
There is no trigger to pull
September 08, 2012 | Globeinvestor.com: | Eric Reguly
Eric_Reguly 
december 2013 by jerryking
Dundee’s real-time data innovations are as good as gold -
Dec. 01 2013 | The Globe and Mail | ERIC REGULY

Installing a data network in the mine puts Dundee at the forefront of the industry’s next phase – treating mines as if they were just-in-time manufacturing sites. That means every activity, from the number of scoops of ore delivered to the crushing machine to the number of metres drilled into the rock face, is recorded and displayed in real time.

In most mines, this data is now written on paper and collected at the end of the work shift, and the numbers are often inaccurate. “We want to turn an extremely low-tech industry into a high-tech industry,” Mr. Howes says. “If this industry wants to advance, it’s going to take a lot of software development.”

Any mishap or slowdown, from a truck that has made an unscheduled stop to a miner who is behind schedule, is immediately transmitted to the surface and action is taken. The surface crew even knows the whereabouts of its workers because an RFID – radio frequency identification device – is embedded in the battery that powers the helmet-mounted lamps.
real-time  Eric_Reguly  mining  massive_data_sets  Wi-Fi  RFID  data  Dundee 
december 2013 by jerryking
'Big Mick' returns to mining - and he's hungry for acquisitions
October 1, 2013 | Globe & Mail | ERIC REGULY.

Mick Davis is back in the mining game....Mr. Davis, older, leaner but still hungry, along with a few former Xstrata executives, has launched X2 Resources, a private company that has raised $1-billion (U.S.) and plans to raise more. The goal is to give it the firepower to pounce on mining assets that the X2 executives consider undervalued in a market that has lost its love for commodities....Mr. Davis is bullish on commodities and thinks the selloff that sent mining company values plummeting is overdone, although he does not see a return to the "explosive" demand that turned mining companies such as Xstrata into some of the biggest wealth generators of the pre-2008 era. "We still have a lot of conviction about the resources industry," he said. "We're seeing ongoing demand in the developing world and the rise of consumer markets there."

Mr. Davis built his career on this "stronger-for-longer" theory that was centred on he belief that urbanization in China, India and some parts of sub-Saharan African would send the prices soaring for the copper used in everything from plumbing to the coal burned in electricity plants....In a statement, Jim Coulter, TPG's founding partner, said it invested because "the X2 team has an impressive track record of building metals and mining platforms around the world."
Eric_Reguly  Mick_Davis  Second_Acts  Glencore  staying_hungry  mining  commodities  private_equity  mergers_&_acquisitions  TPG  natural_resources  X2  Xstrata  entrepreneur  privately_held_companies  urbanization  China  India  sub-Saharan_Africa  investment_thesis  undervalued  developing_countries 
october 2013 by jerryking
The biggest threat to the global economy? The weather -
Sep. 06 | The Globe and Mail |ERIC REGULY

In an interview in Munich, Peter Hoppe, the meteorologist who is head of the reinsurance giant’s georisk unit, said: “Climate change will create security problems because of the migrations it will create.”

Drought is emerging as one of the biggest natural hazards. It has the potential to reshape human landscapes and entire economies, mostly for the worse but sometimes for the better. Canada is less prone to drought than the United States; it could emerge as the world’s emergency breadbasket if the warming trend extends the growing season and the amount of productive agricultural land....Droughts are especially ugly because they sometimes develop gradually, meaning that their potential to cause harm is often ignored, and can last many years. ...The former boss of the World Food Program, Josette Sheeran, was fond of saying that the desperately hungry do one of three things: They riot, they migrate or they die. The Syrian civil war is giving the world an uncomfortable taste of the effects of mass migration. An enormous drought could make that migration look small and its security and economic consequences would be hard to fathom. It appears that no country, rich or poor, has a plan to deal with mass drought and mass migration.
extreme_weather_events  weather  climate_change  insurance  Munich_Re  Eric_Reguly  natural_calamities  droughts  farmland  food  hunger  mass_migrations  agriculture  threats  security_&_intelligence  slowly_moving  geopolitical-risk  global_economy  imperceptible_threats 
september 2013 by jerryking
The decline and fall of Canada’s global corporate superstars - The Globe and Mail
Aug. 16 2013 | The Globe and Mail | Eric Reguly.

Here’s a depressing exercise: Scan the upper reaches of the Top 1000 companies in the July-August issue of Report on Business magazine and try to spot Canada’s global winners.

You could call them Canada’s corporate ambassadors, if they existed.

The short list is exceedingly short:
...Why does Canada, a Group of Seven country that encourages open markets, celebrates innovation and risk-taking, pumps fortunes into R&D, votes in business-friendly governments, is blessed with skilled workers and globally competitive tax rates and sits on the doorstep of the world’s largest market produce so pathetically few global corporate superstars?....It can take decades, a century even, to build a company like Inco or Dofasco. Don Argus, the former chairman of BHP Billiton of Australia, the world’s largest mining group, was right to denounce Canada’s sellout culture. “Canada has lost more head offices than any other country,” he said in 2008, at the height of the resources’ buying and selling spree. “Canada has already been reduced to an industry branch office and is largely irrelevant to the global mining stage.”

Of course, BlackBerry doesn’t really play into the hollowing out story. In retrospect, it should have foisted itself on Microsoft, Nokia or Amazon shortly after it became apparent to investors and tech geeks, if not to the deluded executives at BlackBerry itself, that the iPhone was here to stay. BlackBerry’s value destruction since then has been awe-inspiring. Mr. Lazaridis and Mr. Balsillie were superb entrepreneurs, but failed at keeping the company competitive.

So why does Canada lack global champions? Don’t blame government policies. Blame the sellout culture, nice-guy directors with a propensity to protect the wrong executives at the wrong time and Canada’s classic lack of corporate self-confidence. The upshot is a country that turned into a one-trick pony – oil sands – with a few decent, protected banks and insurers at its side. If Switzerland, the Netherlands and Sweden can churn out global champions, Canada should be able to at least double the rate. The next BlackBerry is not just around the corner.
Blackberry  boards_&_directors_&_governance  brands  branch_plants  competitiveness_of_nations  decline  Eric_Reguly  G-7  global_champions  head_offices  hollowing_out  large_companies  multinationals  oil_sands  sellout_culture  superstars  value_destruction 
august 2013 by jerryking
Angeliki Frangou: A Greek shipping magnate who sails into the wind - The Globe and Mail
Jul. 05 2013| The Globe and Mail | ERIC REGULY.

As a teenager, Ms. Frangou would cross the Atlantic on one of her father’s vessels, but needed time to be convinced that a shipping career was for her. She was more interested in mechanical engineering and so studied the subject at New Jersey’s Farleigh Dickinson University, and then completed a master’s degree, also in mechanical engineering. She decided to bolster her career prospects with an MBA from New York University, but never graduated because she took a job as an analyst on the trading floor of Republic National Bank, where she worked from 1987 to 1989.

The bank job changed Ms. Frangou’s life because it exposed her to the world of financial engineering. She worked with credit default insurance, which taught her how to judge risk and how to hedge, as well as the dangers of excessive leverage in a highly cyclical business. Indeed, applying the principles of high finance to the more down-to-earth business of filling cargo holds with soya, wheat and oil products gave her an edge in an industry that has suffered greatly since the financial crash of 2008.

After the Fulvia success, Ms. Frangou went to ship auctions in Brazil to buy and restore orphaned vessels. In 2004, she zeroed in on special purpose acquisition companies, or SPACs, as a vehicle that could bring her business to the next level. These entities, also known as “blank cheque” companies, traded over the counter in the American market, had no income and were designed to make acquisitions.

Ms. Frangou launched a SPAC with $200-million (U.S.) in investor funds and used the vehicle to buy International Shipping Enterprises, which United States Steel Corp. established in the mid-1950s to transport iron ore from Venezuela to Canada and the United States.

The new company, renamed Navios, became one of the very first dry-bulk shipping companies to list on a stock exchange. Traditionally, Greek shipping magnates had cherished their privacy. “A SPAC can take you public very quickly,” she says. “I totally changed this market, which became a $10-billion business.”
Greek  maritime  Eric_Reguly  shipping  women  entrepreneur  financial_engineering 
july 2013 by jerryking
Fence 'em in
January 25, 2013
If Stephen Harper now thinks that the oil patch is too strategic to be gobbled up by foreigners, what about farmland and gold?

ERIC REGULY
Eric_Reguly  farming  farmland  natural_resources  agriculture  protectionism 
january 2013 by jerryking
Tech drives nails into coffins of Europe’s weak economies
Nov. 30 2012 | The Globe and Mail | by ERIC REGULY.

Technology is having a devastating effect on employment, which in itself is not new. What is new is that the job destruction everywhere among low-skilled workers seems on the verge of being repeated among white-collar jobs. That is the theory of Erik Brynjolfsson and Andrew McAfee, digital economy specialists at MIT and authors of Race Against the Machine, a book about the digital revolution and how it is reshaping employment and entire economies.

Technology has been displacing jobs since the Industrial Revolution, but the lost jobs were more or less replaced with new jobs
Eric_Reguly  Europe  EU  debt  Erik_Brynjolfsson  technological_change  Andrew_McAfee  digital_economy  MIT  Greece  technology  job_destruction  job_displacement  automation  white-collar  low-skilled  weak_economy  digital_revolution 
december 2012 by jerryking
Michael Tory: From Lehman’s ashes, a banker is reborn
Dec. 15 2012 | The Globe and Mail | ERIC REGULY.

Mr. Tory had launched a firm called Quattro Partners, since recast as Ondra Partners, which he tailored to the harsh new reality of the post-Lehman world. It would be a pure advisory firm, making it rare, perhaps unique, in London’s cluttered investment banking industry, where the transaction – and the typically fat fee that goes with it – utterly dominates the business model. In the deliciously brutal argot of the street, this is known as “eat what you kill.”

Ondra would make advice its only activity; the firm’s livelihood would not depend on transactions such as debt underwritings or success fees on mergers and acquisitions. It would only take on clients who would pay retainers to cover Ondra’s running costs, with any discretionary transaction-related fees adding to profit.

None of the partners would get stinking rich, but, equally, they would not have to act as shills, eternally pushing services or products because they paid jackpot returns, not necessarily because they were in the best interests of the client. ...Ondra is becoming a player in the City, as London’s financial district is known. Its name is popping up regularly in the financial press and its clients are getting bigger. They include GDF Suez, Prudential, Société Générale and National Grid.
Eric_Reguly  London  United_Kingdom  investment_banking  Ondra  start_ups  eat_what_you_kill  boutiques  John_Tory 
december 2012 by jerryking
The head-office exodus - The Globe and Mail
Jun. 29 2012 | The Globe and Mail | ERIC REGULY.

Gord Nixon stated that “we should be asking why so many of our industry leaders are being consolidated, rather than doing the consolidating; why we are losing head offices at such an alarming rate; and what is the cost?”...Hollowing out has turned Canadians into bit players in industries that we used to dominate, or where we at least had a seat at the table....Why are Canadians so keen to sell? Lack of confidence is a good place to start. For decades, Canadian companies had capital handed to them, first by the British, then by the Americans. Now that CEOs face a global fight for capital, many of them seem to be taking the easy way out and selling to, rather than competing with, big-name rivals.

Greed is surely another reason. Canadian investors adore instant gratification, even if it means giving up a long-term growth play....All hope is not gone. We’ve lost head offices in mining, beer, steel and other businesses, but there is an industry where Canada has a chance to become a world-beater: agriculture. We have land, water, technology, potash-based fertilizer and infrastructure, such as rail and ports. Another two billion people will have to be fed by 2050. Canada should, and could, build its own Glencore, Archer Daniels Midland, Cargill or Monsanto.

Oops! We’ve now agreed to sell Viterra and its irreplaceable grain elevators, to Glencore.
Eric_Reguly  exodus  mining  mergers_&_acquisitions  Glencore  agriculture  hollowing_out  Strata  sellout_culture  global_champions  Viterra  head_offices 
june 2012 by jerryking
What makes Mick Davis stand out -- strong nerves
27 Mar 2007 | The Globe and Mail pg.B.2. | Eric Reguly.

Canadian mining bosses should get out of the office more often...For Canadian (mining CEOs) when the price rises sharply, visions of price collapse immediately fill their heads, and for good reason. The last downward cycle was so brutal that the mining companies were lucky to come out of it alive. They totally misjudged the current cycle, though. The Canadian CEOs should have spent less time on the golf course and more time watching stockpiles of nickel (and copper, zinc and lead) in Shanghai, Mumbai, Taipei and Seoul disappear like beer at Oktoberfest....Xstrata CEO Mick Davis and the intelligence gatherers at Glencore International, the commodities trader that controls 35 per cent of Xstrata, endlessly traipse around the planet to pick up information on reserves and supply and demand. They feed the data into a black box, which rattles and shakes and spits out a range of eye-popping numbers. Then Xstrata runs out and buys nickel companies when nickel prices are outrageously, unsustainably, stupidly high, or so everyone else thinks. Then the company and its shareholders make obscene amounts of money....CVRD and Inco have been spectacularly right, the Canadians spectacularly wrong. The result is a Canadian nickel mining industry with no nickel miners left of any size. Falconbridge, Inco and LionOre have been eradicated as independent, home-grown names. Investors who sold Inco and Falconbridge left fortunes on the table...The Xstrata lads didn't just get smart on price forecasts. They also figured out how to treat the hedge funds: Respect but don't fret about them. The hedgies pump volatility into the system. When commodity prices fall, say, 10 per cent, share prices might fall by double that amount as the hedgies head for the tall grass. As a CEO, you need strong nerves to endure such violent up and down movements. Mr. Davis has strong nerves and it has paid off. Many other mining bosses look at the hedge funds with fear.
CEOs  commodities  commodities_supercycle  Eric_Reguly  Glencore  inventories  lessons_learned  market_intelligence  Mick_Davis  mining  price_forecasts  scuttlebutt  sellout_culture  stockpiles  volatility  Xstrata 
june 2012 by jerryking
globeadvisor.com: FEEDBACK
BIG TROUBLE WITH BIG AG

Eric Reguly's column criticizing Bill Gates's recent advocacy of high-tech, genetically modified crops to combat food shortages generated much discussion among readers. One who's worked as a food and nutrition consultant with UNICEF, the World Health Organization and the World Bank said: On one of my trips to the wheat growing areas of Egypt, I found that the farmers use growing and storage practices which can best be described as medieval (JCK: archaic). A local official has estimated that between 30%-50% of the wheat and maize crops are wasted because of poor harvesting and storage techniques. If Egypt were able to have decent post-harvest handling systems, they would reduce their imports of wheat by about 30%. Another suggested that Bill Gates needs to talk to the small farmers who practise cheap, low-tech approaches to farming and not just the big agro-chemical multinationals.
agriculture  archaic  billgates  Egypt  Eric_Reguly  farming  genetically_modified  multinationals  smallholders 
may 2012 by jerryking
globeadvisor.com: The hunger game
April 27, 2012 | Report on Business | ERIC REGULY.
Bill Gates's recipe for boosting world food output may fatten Big Ag's bottom line, but what about small farmers?

The International Fund for Agricultural Development.

The problem is that there is ample evidence that the yield gains GM seeds produce are somewhere between overblown and negligible in many cases, and that GM foods have unknown effects on human and animal health because they haven't been subjected to long-term independent studies.

Problem: Smallholder farmers in developing countries who supply offshore corporations won't necessarily grow the diversity of crops needed by local populations. And farmers who depend on one crop are more vulnerable to financial ruin if a new disease, fungus or pest hits. Many small farms also don't earn enough income to pay for GM seeds and specialized crop-protection goop to go with those seeds.
billgates  Gates_Foundation  genetically_modified  Eric_Reguly  agriculture  productivity  farming  Monsanto  philanthropy  Nestlé  P&G  smallholders 
april 2012 by jerryking
Viterra another example of Canadian short-sightedness - The Globe and Mail
ERIC REGULY | Columnist profile | E-mail
ROME— From Saturday's Globe and Mail
Published Friday, Mar. 23, 2012

The point is that Viterra is irreplaceable, certainly within our lifetime. Glencore is nabbing 63 grain elevators and seven port terminals in Canada that could not magically be built overnight should another group of investors decide to clone Viterra.

This industry has massive barriers to entry and that’s why Glencore, led by the ever-savvy Ivan Glasenberg, pounced. For him, it was a once in a lifetime opportunity (and pocket change compared to Glencore’s $45-billion market value). If he didn’t nail Viterra, he knew it would have disappeared into the maw of Archer-Daniel-Midlands, Cargill, Bunge, Louis Dreyfus or any of the other agribusiness heavyweights who know that food isn’t going out of style and that feeding another 2 billion people by 2050 just might translate into compelling growth story....If there is one industry that had a bright future, it was global agriculture and Canada had all the components: Land, water, fertilizer, technology, schools, expertise, infrastructure, agri-business companies. What it lacked was ambition.

Viterra could have been the foundation of a Canadian Glencore or Cargill. Now it’s a piece of someone else’s global vision.
Eric_Reguly  agriculture  agribusiness  barriers_to_entry  Viterra  M&A  mergers_&_acquisitions  farming  sellout_culture  short-sightedness  one-of-a-kind  Glencore  ADM  Cargill  Bunge  Louis_Dreyfus  vision  ambitions  uniqueness 
march 2012 by jerryking
Globe Correspondents - The Globe and Mail
ERIC REGULY

ROME - Globe and Mail Blog

Last updated Wednesday, Nov. 30, 2011
TSX  bourses  Eric_Reguly  LSE  TMX 
november 2011 by jerryking
Read my lips: we need taxes - The Globe and Mail
Eric Reguly | Columnist profile | E-mail
From Friday's Globe and Mail
Published Thursday, Oct. 27, 2011
Eric_Reguly  taxation  Tea_Party 
october 2011 by jerryking
Glencore IPO brings out the rah rah in London traders
May. 18, 2011 | The Globe and Mail | ERIC REGULY.

Glencore is part miner and part trader, making it hard to value.

The mining assets are easy to value. For the public ones, like Xstrata, owner of Canada’s Falconbridge, all you have to do is look at the share price. The value of non-public mining assets can be estimated by attaching a peer-group trading multiple to them.

The trading side is where things get tricky. Trading is a huge business at Glencore, accounting for more than a third of its 2010 earnings before interest, taxes, depreciation and amortization (EBITDA) of $6.2-billion; mining made up the rest.

What valuation to attach to this hybrid beast? That’s hard to say, because no directly comparable company exists. While trading oil, coal, wheat and other commodities can be hugely profitable, it can also be hugely risky. Trading profits, it turns out, can fall just as hard and fast as mining profits, though some investors might think otherwise.
Eric_Reguly  IPOs  Xstrata  Glencore  mining  traders  valuations 
october 2011 by jerryking
How Apple outsmarted RIM and Nokia
Oct. 08, 2011| Globe and Mail| ERIC REGULY.

On Tuesday at a tech fair in Finland, Nokia boss Stephen Elop said “the iPhone did something disruptive. It introduced a new level of experience … that all of a sudden everything else was measured against.”

...Apple’s genius was to make it a platform that could feed off a vast ecosystem that included iTunes and a stunning array of apps, from the Angry Birds game to carbon footprint calculators (the list has reached 500,000, should you have some free browsing time this weekend). The ecosystem is like a perpetual motion machine. Its sheer size attracts more and more app developers, who in turn make the ecosystem deeper and richer and ever more attractive to customers....

It was a great compliment to Steve Jobs and Apple. Mr. Jobs died the next day, but left Apple in great shape. It appears that Nokia, RIM and Apple’s other diminished rivals will measure their products against the iPhone for some time. The lesson: Build ecosystems, not just phones.
Eric_Reguly  Apple  RIM  Nokia  ecosystems  lessons_learned  competitive_strategy  platforms  network_effects  virtuous_cycles  winner-take-all 
october 2011 by jerryking
St. Mychal of ground zero: a personal reflection
Sep. 10, 2011 | The Globe and Mail | eric reguly AND karen zagor
Eric_Reguly  9/11  reflections 
september 2011 by jerryking
Nortel rescue should start with board
10-01-2002 | The Globe and Mail | Eric Reguly it's up to the
board to send the CEO packing if he blows one quarter after another.
Last week, a new report published by the Canadian Council of Chief
Executives (formerly the Business Council on National Issues) concluded
that in an era of tarnished corporate reputations, strong and
independent boards are among the necessary requirements for improved
corporate governance. The chapter on directors says that "in order to
protect the interests of shareholders, boards must be in a position to
evaluate objectively the performance of the CEO and take action
accordingly."

Evaluated objectively, Mr. Dunn has been a dud. As a senior finance
employee and, later, chief financial officer, in the late 1990s, he was
intimately involved in approving the string of overpriced,
top-of-the-market acquisitions that accelerated Nortel's downfall. His
reward was a promotion to CEO in early 2002.
Nortel  Eric_Reguly  boards_&_directors_&_governance  CEOs 
april 2011 by jerryking
Big Food giants want to save us from junk food. Really. - The Globe and Mail
Feb. 25, 2011 Globe and Mail Eric Reguly

The potential problem with the food processors’ elevated interest in
farming is that, through sheer bulk, they can shape local economies and
environments in their favour. Strong demand for a single crop could lead
to the loss of crop diversity. Local regulations designed to protect
the public interest, such as non-privatized water supplies, could be
compromised, particularly in developing countries with weak governments.
And Big Food could use its clout with farmers and retailers to displace
locally grown foods with its own processed foods.

Big Food is going to get bigger as it exploits every inch of the value
chain, from farm to pharmacy.
Nestlé  Kraft  Coca-Cola  food  Eric_Reguly  Pepsi  farming  agriculture  Big_Food  developing_countries 
february 2011 by jerryking
Rare Air - The Globe and Mail
Jun. 20, 2007 | Globe and Mail Update | Eric Reguly
airline_industry  manufacturers  Eric_Reguly 
february 2011 by jerryking
Agriculture becomes the next big thing -
Nov. 04, 2010 | The Globe and Mail | ERIC REGULY | With the
amount of arable land increasingly slowly, improving crop yields on
existing farmland becomes the default option. The best way to do so is
through irrigation (within the constraints of water supply) or
fertilizer, assuming the farmer can afford fertilizer.
agriculture  Canada  potash  mergers_&_acquisitions  BHP  Saskatchewan  Eric_Reguly  farmland 
november 2010 by jerryking
The next commodities king
March 20, 2010 | globeandmail.com | by ERIC REGULY
mining  Xstrata  Glencore  Eric_Reguly  commodities  Vale  Marc_Rich 
april 2010 by jerryking
Sowing the seeds of regret? - The Globe and Mail
June 1, 2009 | The Globe & Mail | Eric Reguly. Article
deals with emerging tensions over the trend towards International farm
investment. Countries short of productive agricultural land but rich in
capital are acquiring farmland in countries, most of them poor, with
land to spare, or allegedly so. In many cases, the food grown on the
farms is effectively removed from the world market and exported back to
the country that did the deal.
Eric_Reguly  Africa  farmland  capital  exploitation  regrets 
june 2009 by jerryking
Big eau
April 2008 | Report on Business Magazinei | by Eric Reguly.
Privatized water has been an on-again, off-again trend in parts of the
world for a century or more. Higher growth rates, however, are bound to
return at some point as urban densities increase and private engineering
talent is needed to solve water-shortage problems. Water companies can
do themselves a favour, too, by accepting, even encouraging, the
strictest public oversight and regulations.
Eric_Reguly  water  privatization  municipalities 
june 2009 by jerryking
Think small
February 29, 2008 | Globe & Mail | Eric Reguly
smart_meters  Oxxio  Eric_Reguly  size 
may 2009 by jerryking
Blackstone probably just the tip of China's private equity iceberg
01/06/07 | From Friday's Globe and Mail| ERIC REGULY

China, the oil-rich Arab countries and Russia will use private equity
investments and partnerships to buy everything from oil sands and tech
companies in Canada to manufacturing and financial services in Europe.
Maybe those investments are being made right now, or have been made. We
don’t know. Private equity does not have loose lips. Secrecy is their
currency.
private_equity  Eric_Reguly  China  opacity  Blackstone  secrecy  discretion 
march 2009 by jerryking

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