Identifier: About Our Business

Portfolio markets summary

Equity markets continued to rise this quarter but at a slower pace. Despite continued concerns about the health crisis and unemployment, the S&P/TSX Composite Index was up 4.7% and the MSCI World ex Canada Index (C$) was up 6.0% this quarter. Higher returns reflect rebounding corporate earnings and investors’ expectations that the economy will continue to recover from low levels. The continued recovery is supported by historic levels of stimulus and a commitment by policy makers to remain supportive through the recovery. While stimulus payments to people who lost their jobs have ended in some countries, it’s likely that there will be further policy responses, especially if there are setbacks to the recovery. One such setback is if COVID-19 daily cases rise to levels requiring further social distancing. Despite the rise in cases we saw this quarter, hospitalizations are down which makes the health crisis more manageable. 

Bond returns benefited from an improved investment outlook this quarter.  The FTSE Canada Universe Bond Index was up 0.4% this quarter. Most of the return came from corporate bonds which saw yields decline back to more normal levels. The decline in yields was helped by the Bank of Canada buying these bonds and signaling a willingness to increase their purchases. Canada government bond returns by comparison were lower as bond yields ended the quarter modestly higher than where they started.

Equity markets decline and recovery

Source: Refinitiv Datastream

Growth significantly outperforms value

Source: Refinitiv Datastream

Portfolio strategy

Our tactical allocation investment process continues to point to an improving economic backdrop. To reflect this, portfolios are modestly overweight equities. As our conviction in the recovery grew this quarter, we chose to increase the portfolio weighting to asset classes that tend to do well at in the early part of a market cycle. Within equities we increased the weight to Canadian small caps and within fixed income we increased high yield bonds. A more positive economic backdrop supports increasing the weight of these more cyclical asset classes.

Overall our equity teams continue to own resilient, stable businesses that have strong earnings growth relative to the market. These factors fall under the growth style of investing and have been rewarded by the market over time. This has been especially true this year, both during the market decline and recovery. As the economic outlook improved we have moved cautiously towards cyclical companies. Within Canadian equities this means adding companies in industrials, consumer discretionary and financials. Within our global strategy the biggest change has been to increase emerging markets exposure. Within fixed income portfolios we have increased our weight to corporate bonds and have an underweight to provinces that have most significantly expanded their budget deficits. 

From the desk of Jeff Guise, Managing Director, Chief Investment Officer, CC&L Private Capital.
This post is for information only and is not intended as investment advice. The views expressed are those of the author at the time of publication and are subject to change at any time.

As the COVID-19 situation continues to evolve, we are working closely with Connor, Clark & Lunn Financial Group’s management and business continuity teams to carefully monitor the ongoing developments. As we move forward during this unprecedented time, I wanted to update you on our business.

Our priority is the health and well-being of our employees both at Banyan and within our portfolio companies, while ensuring we are able to continue to maintain business operations and provide leadership, guidance and oversight to our businesses. For this reason, we have made the decision that all Banyan employees will work from home until further notice.

From the onset of the outbreak, we have implemented policies and preventative measures including restricting business travel, health awareness campaigns and encouraging the use of video and teleconference for interactions. Additionally, we proactively reviewed and successfully tested our business continuity plan with staff working from home to ensure no disruption to our services. We continue to be contactable, though the ways we interact with you may change.

We are fortunate that our portfolio businesses are well capitalized, have strong leadership teams and are prepared to manage through the volatility of the months ahead. Banyan continues to have a significant amount of capital to deploy and remains open to new investment opportunities. We continue to believe in the long term prospects of the economy both within Canada and abroad. We will overcome the near-term challenges of COVID-19!

As the situation evolves, we will continue to carefully monitor the ongoing developments related to COVID-19. We will provide you with further updates, as appropriate. We would like to take this opportunity to thank you for your continued support. Should you have any questions or concerns, please do not hesitate to email, call or text me.

We hope you remain safe and well.

Best regards,

Jeff Wigle
Managing Director
Banyan Capital Partners
(416) 564-0737
[email protected]

VANCOUVER, BC, AUGUST 8, 2019

Rack Attack, a Banyan Capital Partners portfolio company, recently announced partnerships with USA Cycling and Cycling Canada, as their official rack retailer.

A premier North American vehicle rack retailer, Rack Attack provides cycling enthusiasts with quick and easy rack solutions from the best brands in the industry. In the capacity of these new partnerships, Rack Attack will provide rack solutions and installation support for bike transportation needs to USA Cycling and Cycling Canada. Further, Rack Attack will also offer exclusive benefits and assistance to athletes and members across North America.

“Rack Attack has always been committed to the cycling community and our partnership with USA Cycling and Cycling Canada only solidifies our position,” said Alexander Welbers, CEO of Rack Attack. “We are looking forward to working with both teams, the athletes and all the other cycling enthusiasts.”

Rack Attack’s network of stores provides personalized consultations, rack and trailer hitch installations, and exceptional customer service. All members receive access to their very own online store that enables them to get their favorite bike rack delivered anywhere in the continent in as little as two days at no additional charge.

“We are excited to have Rack Attack on our team and to provide our riders with this new member benefit. Our partnership with Rack Attack allows us to provide another meaningful benefit to our USA Cycling members; they have solutions and support for the wide range of riders in our cycling community,” said Liz Kollar, USA Cycling’s Director of Membership.

“We are proud to welcome Rack Attack to our family of partners and suppliers,” commented Matt Jeffries, Executive Director, Cycling Canada. “We are grateful for the support they will provide our organization and the broader Canadian cycling community.”

About Banyan Capital Partners

Banyan Capital Partners is a Canadian based private equity firm that buys and invests in private and public middlemarket companies located in North America. As a generalist firm, Banyan provides full or partial liquidity to existing owners or partners with owners wishing to grow their companies and become more successful. Banyan is part of the Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliated companies collectively manage approximately $77 billion in assets. www.banyancapitalpartners.com

About Rack Attack

Founded in 1996, Rack Attack is a premier retailer of vehicle rack solutions in North America. With 17 locations across Canada and the United States, Rack Attack offers a large selection of high-quality brands and products.

Contact


Jeff Wigle
Managing Director
Banyan Capital Partners
(416) 216-7076


Blaze James
Marketing Manager
Rack Attack
(604) 872-5224

A leading Canadian mid-market private equity firm, Banyan Capital Partners represents business strength, longevity and growth. Our success is rooted in our experience, relationships, and our proven reputation for honesty, respect and integrity. To highlight recent updates to our business and team, we are pleased to share with you the following update.

TEAM UPDATE

Scott Morrison, Associate, Business Development

We recently welcomed Scott Morrison to our team. At Banyan, Scott is responsible for leading business development initiatives, broadening our relationships with deal flow sources, and managing the deal flow pipeline. Prior to joining Banyan, Scott worked at Avison Young where he was responsible for sourcing and closing sale and lease transactions, as well as identifying new business opportunities. Scott has a Bachelor of Commerce (Honours) from Queen’s University and is a Certified Commercial Investment Member.

PORTFOLIO UPDATE

Continuing its growth trajectory, in April Rack Attack added two new stores in Los Angeles, California. The Santa Monica store, formerly a successful store under the Rack Solid banner, was acquired from its original owners as part of a succession plan. The Pasadena store represents the third new greenfield Rack Attack location in the last 13 months.

In April, Newcrete acquired Dawe’s Concrete Products Ltd., a provider of aggregates and concrete servicing the General St. John’s area. This is the second acquisition for Newcrete under Banyan’s ownership.

On April 1, 2019, Banyan’s interest in GWA was successfully acquired by Drive Products Inc.

About Banyan Capital Partners

Banyan Capital Partners is a private equity firm focusing on transition and expansion investment opportunities in middle-market businesses across North America. Banyan is an affiliate of Connor, Clark & Lunn Financial Group, a multi-boutique asset management firm that provides a broad range of distinct and independently managed investment products and services to individual and institutional investors. CC&L Financial Group and its affiliates are collectively responsible for the management of over $75 billion in assets.

For more information, download our corporate brochure or visit our website.