(Bloomberg) -- Power Sustainable, an investment firm controlled by Canada’s billionaire Desmarais family, tapped Bruce Heyman as its chief executive officer with a mandate to attract more capital from global institutional investors.
The company, a unit of Power Corp. of Canada, wants to boost its appeal to institutions and family offices, particularly in the US but also in Europe, Asia and Canada. So it’s turning to Heyman, who was a managing director at Goldman Sachs Group Inc. before being appointed by the Obama administration in 2014 as the US ambassador in Ottawa.
“The opportunity set is huge. We have incredible managers, we have the Power Corp. brand, we have the family, we have invested our own capital and now we’re out telling our story,” Heyman, 66, said in an interview with Bloomberg News. “We are built for large pools of capital, and we are built for very large mandates now.”
Power Sustainable, which started in 2019 with C$1 billion ($741 million) of capital, invests in companies and projects that aim for good sustainability outcomes as well as strong returns.
The business is still relatively small: Assets under management were C$3.9 billion at the end of June — and much of that comes from the parent company or affiliates such as Great-West Lifeco Inc. Now it has to take the next step and lure third-party capital to grow.
Olivier Desmarais, the 42-year-old grandson of late patriarch Paul Desmarais, will remain as Power Sustainable’s chairman and said he will be fully dedicated to the company.
“I have a goal of what Power Sustainable can be,” Desmarais said when asked why he is stepping aside as CEO. “Bruce right here, with his 33 years of working as a partner at Goldman Sachs, has a wealth of experience that can only be additive toward growing this.”
The Montreal-based firm manages private equity and credit funds through strategies focused on renewable energy, infrastructure and agri-food companies. A new strategy will be launched soon to invest in mid-market businesses that are contributing to the decarbonization of the economy.
“We are finding there are a lot of institutions that want to invest in sustainability, but there are very few pure players out there,” said Heyman, who’s been an adviser to the firm since 2021.
Power Sustainable has yet to reach profitability, though management believes that may happen within the next two years, Desmarais said. The division lost C$60 million on an adjusted basis in the first half of the year, according to Power Corp.’s earnings report for the second quarter.
Total assets under management dropped in the first half after the company liquidated its Chinese stock portfolio. Desmarais and Heyman explained that the decision to exit the China equities strategy was due to a combination of tough market conditions and the difficulty of achieving pure sustainability in a public fund in that country.
Power Corp. also controls Sagard Holdings Inc., an alternative investment platform with more than C$30 billion of assets that’s led by Paul Desmarais III.
--With assistance from Gillian Tan.
©2024 Bloomberg L.P.
