Back to the future:
An alliance rooted in independence
Chairman’s & President’s Club – Business Session
Capital Markets Introduction Fred Westra EVP, MD & Head of Capital Markets, iA Securities
Sept 2017
Capital Markets & Fixed Income Roadshow
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iA Financial Group Overview
iA Financial Group • 4th Largest Life and Health Insurer in Canada • $6 billion market capitalization • $155 billion in Assets Under Administration
including HollisWealth • History: 1892 Alliance Nationale was founded;
1905 merged with Industrial Life Insurance Co.
Wealth Management Expansion • iA Securities is 100%-owned subsidiary of iA
Financial Group • For the IIROC advisors, HollisWealth
will operate under a business division of iA Securities named HollisWealth
Size, Stability & Sponsorship
+
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iA Securities Overview Combined Assets under Administration by Region
11% 46%
20% 4%
19%
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Competitive Environment = Opportunity
BankOwnedDealers Independents SmallBou5ques PremierBou5ques
Widening Gap
Firm Ranking By Retail AUA 1. RBC $280.0 B 7. iA Securities $ 35.0 B
2. BMO $150.0 B 8. Raymond James $ 35.0 B
3. CIBC $150.0 B 9. Desjardins $ 30.0 B
4. Scotia $145.0 B 10. Richardson GMP $ 28.3 B
5. National Bank $105.0 B 11. Manulife $ 19.0 B
6. TD $ 85.0 B 12. Canaccord $ 9.8 B
Trends 1. Compliance costs rising 2. Margins compressing 3. Capital constrained 4. Banks dominate 5. Disintermediation
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Conferences and Site Visits
Hotel Lunch A discussion on Canadian Tourism and the
Canadian Hotel Property Sector
Royal York Hotel, Toronto 20th July 2015
Home is where the Heart is Residential Real Estate
and Financial Services Conference
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Investment Bank / Corporate Finance
Capital Markets is the relationship manager with corporate clients
Capital Markets Group
Trading Support
Marketing Support
§ Mergers & Acquisitions
§ Divestitures
§ Management Buyouts
§ Restructuring
§ Shareholder Return Advisory
§ Equity
§ Fixed Income
§ Mezzanine Products
§ Non-Deal and Deal Investor Roadshows
§ Conferences
§ Investor Follow-up and Feedback
Research Financing Advisory
§ Trading Updates to Issuers and Team Members
§ Flow Trades
§ Liaise with Institutional and Retail Clients
§ Provide Market Intelligence and Industry Experience to Investors, Bankers and Sales & Traders
§ Regularly Publish Reports on Coverage List of Companies
§ Initiations on New Names
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Investment Bank’s Role in Investor and Issuer Dealings
• Match capital holders (investors) with consumers of capital (issuers) to investment targets and growth needs, respectively
• Provide buy and sell advice to retail and institutional investors
• Provide capital structure and strategic advice to issuers
• Provide access to quality new issue products to investors
ECM
Sales & Trading
ISSUER
Research
IB
Retail
Institutional
INVESTOR
Intermediary
New Issue Deal is Dynamic
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Equity Research
• Sector Specialists • Analyst coverage targets of 15-25 issuers per
analyst • Provide in-depth market intelligence, sector
view and industry expertise • Over 55 years experience, CFA Charterholders
and top ranked analysts
Mining & Metals
Power & Utilities
Energy E&P
Energy Services &
Infrastructure
REITs
Financials
Technology
Consumer & Industrial Products
• Research Coverage • 100 names currently covered • Sector coverage, More thematic
• Corporate Access – Retail & Institutional
• Conferences • Bi-weekly analyst Retail calls
Coverage by Market Cap
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Equity Research Performance
N.B. Bloomberg rankings only available for stocks covered over a 12 month period. Last price as of market close 18/04/2017
Analyst Number of Top 3 Bloomberg Rankings Number of Covered Names
Neil Linsdell Consumer and Industrial Products 6 11
Blair Abernethy Technology 6 12
Brad Sturges Real Estate and REITs 4 9
Dylan Steuart Financial Services 7 9
Elias Foscolos Energy, Oil and Gas Services 11 15
George Topping Metals and Mining N/A 7
Jeremy Rosenfield Power and Utilities 8 16
Michael Charlton Energy, Exploration and Production 8 15
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Select Recent Transactions (Equity Issuers)
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Select Recent Transactions (Equity Issuers)
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Select Recent Transactions (Equity Issuers)
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Select Recent Transactions (Structured Products)
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Equity Capital Markets / Syndication
Syndicating - Inviting other investment dealers into the transaction to • Reduce our capital liability on a firm commitment (Bought deal) • Add sales capacity of other dealers and increase distribution • Get reciprocal business
Executing • Discussing the transaction with retail advisors, taking in expressions of interest and
allocating shares to institutional accounts and retail advisors
Opportunity • New issues provide the highest margin in our business
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Equity Capital Markets / Syndication
The Hub of Capital Markets The voice of our firm to all syndication desks in Canada
• A strong syndicate partner; average retail demand is 250x
• Successful distribution = future syndicate positions • Increased retail sales = increased market share = more product for retail
The voice of our firm to/from iAS retail network • Striving to get best fills on orders for iAS advisors
• Get feedback on products of importance to retail
• More new issues equity/debt • More structured product new issues
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Equity Capital Markets / Syndication
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The natural fit between Capital Markets & iAS Retail
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Capital Markets
• Active research creates awareness & demand in the distribution network
• Higher CM syndicate positions allow for better retail fills (higher retail commissions)
Retail
• Large & informed distribution network allows for better demand decisions
• More demand allows for syndicate positioning (higher CM commission)
Demand vs. Fills = Needs for integrated ECM + Banking + Research + Retail strategy • Better demand for new issue allows
– CM to market iAS to new issuers & Big dealers that lead issues (i.e. banks)
– Get on syndicates – Get bigger syndicate percentages
Sector Awareness for Retail • Analyst roadshows • Weekly analyst calls • Research portal & Research distribution • Conferences
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Why is New Issue Business Important to You?
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Opportunities for Retail • Increase revenue • Improve client retention • Attract high net worth clients • Access to new issues • Build wall around clients
More reasons • Offers all types of clients suitable alternatives (i.e. high and mid-low risk alternatives) • Bypasses mutual funds (and fees therein) • Your competitors are doing new issue business and attracting your clients • Revenues derived from new issues are amongst the highest margin for the firm • Most importantly, historical returns have been extremely positive
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Why are You Important to New Issue Business?
• Investment banking relationship
• Research coverage: 8 research analysts covering 96 names
• Trading their stock
• Institutional and Retail distribution
Our ability to distribute stock is crucial and in many cases, is a key differentiator between ourselves and our competition
Corporate issuers are attracted to do business with iA Securities
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éFills
Investment Banking / ECM Role in New Issues
Increased Retail Demand = Increased Market Share Successful Distribution = Larger Syndicate Positions Failed Distribution = No Syndicate Position
Institutions
Syndicate Retail
Selling Group Retail
Fills
New Issue Offering
é Demand
é Outperformance
é Syndicate Participations
Always outperforming means always moving up &
getting more access to producers
éCommission
Marketing our Retail
Placement Abilities
Participation in Equity
Transaction
Retail Sales PERFORMANCE
Market our performance
back to Issuer
Increased Participation /
Allocation
New Issues Sales Cycle
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How We Can Work Together… To Get Started In New Issues
Read emails/research to start understanding the various products
Be Informed
Participate
Communicate
Act
Log-on, listen, participate in conference calls with issuers and call Syndication with questions
Talk to clients and participate in the new issuer meetings, Retail Roadshows, iA Conferences
Begin to allocate parts of portfolios towards new issues
Be Informed
YOUR JOB Continue to focus on tier one corporate clients with long-term successful growth profiles & bring you top quality products
Focus on Top Names
Maximize Deal Flow
Strengthen Relationships
Support You
Continue to increase our deal flow in order to maximize the variety of product
Educate & build relationships with retail advisors to understand your needs
Make you feel welcome to call Syndication with questions and comments
OUR JOB
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Our Journey to Success
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Phase I Phase II Phase III
2017 2018
60-80 120 200
2% 3-4% 5-8%
2-4 6-8 10-15
2019
2016-Current
βeta Phase
Avg. Syndicate Positions:
Number of Leads:
Number of Syndicates:
Create Enterprise Value for the Firm
Buying New Issues à
WALK
RUN FLY
$9B à $35B Transitory Period
32
1%
--
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iA Securities Capital Markets Team
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RichardLegault,CFAPresident
PatrickLaperriere,CFAMD,Ins/tu/onalEquitySales
GeorgeToppingMiningAnalyst
FrederikWestraSVP,MD,HeadofCapitalMarkets
Pierre-FrancoisRoyMD,Co-HeadofECM
SeanMcPhersonResearchAssociate
TrevorConway,MBAMD,InvestmentBanking
LauraCristelloSyndica/on
EliasFoscolos,M.Sc.EnergyServicesAnalyst
DylanSteuart,CFAFinancialServicesAnalyst
JeremyRosenfield,CFAPower&U/li/esAnalyst
FredericDulude,CMTIns/tu/onalEquityTrader
RichardWilliamsMD,Ins/tu/onalEquityTrading
BlairAbernethy,CFAMD,TechnologyAnalyst
StephenLloyd,MBA,CFAIns/tu/onalEquitySales
BradSturges,CFARealEstate&REITAnalyst
NeilLinsdell,CFAMD,HeadofResearch
Louis-SimonGingrasResearchAssociate
DimitriTroulisResearchAssociate
JohnRak,M.ScInvestmentBanking
VilmaJonesMD,Co-HeadofECM
DaveHammondIns/tu/onalEquitySales
John-PaulGrabowski,MBAInvestmentBankingAssociate
RichardLieuResearchAssociate
Valen5nPadureResearchAssociate
RichardKassabian,CFAECM,HeadofStructuredProducts
KevinThompson,MBA,CMAInvestmentBanking
JeretBode,MBAMD,InvestmentBanking
MichaelCharltonEnergyAnalyst
AlexMacIssac,MBAResearchAssociate
GrahamFarrellIns/tu/onalEquityTrader
CharloSeElliotIns/tu/onalEquitySales
DavidBeaSyMD,InvestmentBanking
MontrealHeadOffice2200McGillCollegeAve,Suite350Montreal,QuebecH3A3P8
CalgaryOffice3018thAveSW,Suite600Calgary,AlbertaT2P1C5
TorontoOffice26WellingtonStE,Suite900Toronto,OntarioM5E1S2
DanHardieSeniorInvestmentBanker
Panel Q&A
Thank you! We are looking forward to being your Capital Markets partner.