Briefly:

(November 13, 2006) Canadians are less enthusiastic about potential growth in their real estate investments, a poll released on Monday suggests, and are instead shifting their attention to mutual funds and RRSPs.

Approximately 50% of non-retired Canadians surveyed by Demica for Investors Group believe their real estate assets will grow more in value than their other investments over the next 10 years. That’s down 15 percentage points from last year when the same question was asked.

In spite of this apparent cooling of interest in real estate growth, 51% of Canadians still say they are relying on their home as one of their main sources of retirement income. Among baby boomers, 55% say their home will provide some of their retirement income.

In a press release, IG notes that, historically, residential real estate values have not increased as fast as the stock market. From 1995 to 2005, the average residential real estate sale price increased an average of about 5% per year, while TSX returns averaged 11%.

“Bricks and mortar are no substitute for stocks and bonds. While your home is certainly an investment, it is not a replacement for careful, long-term retirement planning,” says Debbie Ammeter, vice-president of advanced financial planning support at Investors Group.

The poll also found that two-thirds of those who have RRSPs intend to contribute as much or more to their registered plan this year as they did in the previous tax year. Forty-three per cent said they plan to invest in the market via mutual funds.

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Venture capital reaches all-time high

(November 13, 2006) Canadian private equity funds raised a record $6.4 billion in the first nine months of 2006, led by dramatic growth in the buyout sector.

According to the Canada’s Venture Capital & Private Equity Association, the year-to-date figures represent a nearly fivefold increase from the $1.4 billion raised in all of 2005.

When combined with the other major private equity sub-sectors of venture capital and mezzanine funds, total fundraising by Canadian private equity funds amounted to $7.9 billion through Q3, compared to $3.9 billion in the full year 2005, the association said in a release.

“The Canadian buyout sector is emerging as a serious player in the global private equity markets, as the strong returns achieved by Canadian fund managers are attracting more and more attention — and capital — to their funds,” noted CVCA president Rick Nathan. “As more and more companies choose to go private, or to raise growth capital from private sources, the opportunities for private equity investors are building rapidly.”

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AIC to merge American Focused funds

(November 13, 2006) AIC has announced plans to merge AIC American Focused Plus Fund into AIC American Focused Fund on or before December 15th, 2006, subject to regulatory approval.

“AIC American Focused Plus Fund and AIC American Focused Fund share similar investment mandates and have both been under the direction of James Cole, who is one of AIC’s most experienced investment managers,” said AIC CEO Jonathan Wellum. “For this reason, we feel this fund merger will benefit unitholders and also enable AIC to achieve some efficiencies.”

Cole will continue to manage the merged fund, which will still be offered in a corporate class version.

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IAM increases stake in BluMont

(November 13, 2006) Integrated Asset Management has announced its intention to purchase an additional 1.8 million common shares of BluMont Capital, in addition to the 3.2 million shares the firm purchased last month.

The new purchase will give IAM ownership of more than 61% of BluMont’s outstanding shares.

IAM first announced plans to take over the hedge fund firm in May.

(11/13/06)