Aboriginal businesses across Canada are set to receive a $50 million helping hand in the form CAPE Fund Management Inc., an investment fund launched by former prime minister Paul Martin.
Short for "Capital for Aboriginal Prosperity and Entrepreneurship", the CAPE Fund is being backed by Canada's five major banks as well as familiar Northern Ontario faces such as Xstrata Nickel, Vale Inco and Goldcorp.
The fund will focus on projects linked through ownership, employment or geographic proximity to an Aboriginal group or community in order to promote Aboriginal business, entrepreneurship and prosperity.
"When I first approached the investors who are now part of CAPE Fund, I promised them nothing but a major effort at demonstrating that entrepreneurship and the role models it creates would make a difference in the lives of this and future generations of Aboriginal Canadians," said Martin in a release.
"I cannot tell you how proud I am of the investors' response, particularly in these difficult times. We all have a responsibility to make our country a better place."
Investments will generally range from $1 million to $7.5 million, which may occur in one or more rounds of investment. However, most are expected to be in the range of $3 million to $5 million.
To be qualified for investment, Aboriginal businesses must be seen by the investment committee to have long-term economic sustainability, a clear and defined market opportunity, as well as an articulate, realistic and complete business plan. The companies must also be able to provide CAPE Fund with an appropriate return on its investment, and the potential to sell ownership and transfer management to Aboriginal entrepreneurs or communities within a reasonable amount of time.
However, the CAPE Fund will avoid investing in start-ups, unless backed by strong and credible operating partners.
Investees will also receive guidance from fund management to ensure that their business grows through appropriate governance, management, capital and network resources. Ultimately, the fund seeks social returns as well as financial returns for the affected Aboriginal communities.
The CAPE Fund will remain open to new investors for up to six months.