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B15-B20OTTAWA/QUEBECEDITION ■ WEDNESDAY,NOVEMBER13,2019 ■ GLOBEANDMAIL.COMS&P/TSX
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-3.40ALTRIAGROUP.........................................................................B8
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ORGANIGRAMHOLDINGS................................................B2,B11
TCENERG Y...............................................................................B5COMPANIESMichael Sabia is stepping down
from his post as chief executive
officer of Canadian pension fund
giant Caisse de dépôt et place-
ment du Québec after a decade at
the helm, leaving an institution
once marred by crisis on stable
footing but with several looming
challenges.
The former BCE Inc. head said
Tuesday he will be the longest-
serving Caisse CEO when he leav-
es the job in February to lead the
University of Toronto’s Munk
School of Global Affairs and Pub-
lic Policy.
Mr. Sabia said the time is right
to depart because the Caisse’s
portfolios are proving resilient
amid global market swings while
the pension fund’s global foot-
print is well-advanced. Two thirds
of its assets are invested outside
Canada.
He denied he was at odds with
Premier François Legault’s gov-
ernment and said he is leaving on
his own terms. The Munk oppor-
tunity was some time in the mak-
ing, he said, adding the university
was willing to wait until he felt
comfortable leaving the Caisse.
“This is a team sport, this isn’t
about me. [We’ve] built an orga-
nization that is positioned well in
the world, that is performing on a
very solid basis,” Mr. Sabia said.
“There’s always things to do but
generally I think things are in ve-
ry good shape here. And so it’s
time to get on with [this new op-
portunity]. ... At some point you
say to yourself, you’ve got to be
disciplined, time to move on.”
Mr. Sabia, 66, has led the Caisse
through four changes in Quebec
government, navigating the polit-
ically sensitive waters by defend-
ing the Caisse’s decision-making
independence while boosting in-
vestments in local companies
and real estate. He has always in-
sisted that the best way to stoke
Quebec’s corporate champions is
by making them world beaters.
He will leave the job roughly a
year ahead of the formal expiry of
his mandate in March, 2021. He
had said in recent months that he
would not remain as Caisse CEO
past that time, even if asked to
stay.
“In doing this, he stays master
of his own destiny,” said Louis
Hébert, a management specialist
at business school HEC Montréal.
“He came in when there was lots
of turbulence and questions be-
ing asked of the Caisse. He’s stabi-lized the situation and put in
place processes” to withstand
downturns, he said.
Mr. Sabia joined the Caisse at a
low point in its history in March,
2009, and his appointment was
not without controversy at the
time. He was an outsider–aSt.
Catharines, Ont.-born anglo-
phone and a former senior feder-
al civil servant who had previous-
ly served as CEO of BCE Inc., the
parent of Bell Canada.
His predecessor Henri-Paul
Rousseau, a banker, had been
recruited to clean up the institu-
tion, which manages money on
behalf of Quebec public pension
and insurance funds, after it post-
ed poor results coming out of the
dot-com meltdown. Mr. Rousseau
departed in May, 2008, and re-
placement Richard Guay lasted
just a few months.
SABIA,B6M
ichael Sabia could hardly
pick a better moment to
step down as head of
Caisse de dépot et placement du
Québec, having guided the giant
provincial pension-fund manager
out of the mess it was in when he
arrived nearly 11 years ago and
leaving before the next recession
plunges it back into the dumps.
Yet, this is not how he wanted
his tenure to end. His departure a
year before his current four-year
term was to expire in early 2021
will mean Mr. Sabia will not be
around to oversee the completion
of the project he has relished most
as the Caisse’s chief executive: the
$6.3-billionRéseau express métro-
politainlight-rail transit network
that has come to symbolize Mon-
treal’s economic rebirth.
Quebec Premier François Le-
gault, however, has never been a
big fan of Mr. Sabia. If Mr. Sabia is
leaving early, it is because the Pre-
mier has decided he should. Mr.
Legault favours a more interven-
tionist Caisse, one that sees its
role as a backer of Québécois en-
trepreneurs and a rampart
against foreign takeovers.
“I think Michael would have
liked to cut the ribbon on the
REM,” said former Caisse execu-
tive Michel Nadeau, now execu-
tive manager of the Montreal-
based Institute for Governance of
Private and Public Organizations.
YAKABUSKI,B6Sabia’scritics
wantedhim
tofail.Hedid
theopposite
KONRADYAKABUSKIOPINIONSabiatostepdownasCEOofCaisse
Afternearly11years,
pensionfundbossto
leaveinFebruaryto
headMunkSchool
NICOLASVANPRAETMONTREAL
SEANSILCOFFOTTAWA
MichaelSabia'sdeparture
aschiefexecutiveof
Quebec'spensionfund
comesayearbefore
hisfour-yeartermwas
to expire in early
2021.GRAHAM
HUGHES/THECANADIAN
PRESSIMAGESA U.S. investment firm that has been quietly amassing a trove
of Canadian fibre and data-centre assets has acquired Toron-
to-basedBeanfield Technologies Inc., a privately owned
fibre-optic internet provider, with an investment of more
than $130-million.
Colony Capital Inc., a real estate investment firm based in
Los Angeles, branched into digital infrastructure over the
past year, acquiring Digital Bridge Holdings LLC, with which
it raised a US$4-billion fund, Digital Colony Partners. The
fund has a mandate to invest in communications assets such
as wireless towers, data centres, fibre lines and cellular tech-
nology that will be used in next-generation 5G networks.
In its early days, Florida-based Digital Colony has been on
a Canadian shopping spree. It closed the deal to buy Bean-
field last month, and Colony Capital disclosed it in a quarter-
ly financial filing on Friday.
The transaction came just five months after Digital Colony
paid $720-million to buy Cogeco Peer 1, the former enter-
prise-connectivity division of cable company Cogeco Com-
munications Inc. Beanfield has been building fibre-optic in-
frastructure in Toronto since the 1990s and now has a total of
about 350 kilometres of fibre lines in that city and Montreal,
providing more than 700 commercial and residential build-
ings with telecom services.
In a joint deal with European fund EQT announced in May,
Digital Colony also said it will acquire Zayo Group Holdings
Inc., a U.S. company that bought Allstream Inc. in 2016 from
what was then Manitoba Telecom Services Inc. Digital Colony
and EQT plan to take Zayo private in a transaction valued at
US$8.4-billion (not including the assumption of $5.9-billion
in debt) and hope to close the deal in the first quarter of 2020.
BEANFIELD,B6
DigitalColonyaddsto
Canadiantelecomdeals
withpurchaseofBeanfield
CHRISTINEDOBBY
A global consulting company
formerly headed by Canada’s
new ambassador to China is re-
portedly under criminal investi-
gation into allegations that it
concealed conflicts of interest
while advising bankrupt compa-
nies.
The investigation by U.S. fed-
eral prosecutors and a separate
one by the U.S. Trustee Program,
a unit of the Justice Department
that oversees the administration
of bankruptcy cases, cover the
period when Canada’s Beijing
envoy, Dominic Barton, was the
global managing partner of
McKinsey & Co. There is no in-
dication that Mr. Barton himselfis under investigation.
Mr. Barton served as CEO of
the elite consulting giant for nine
years and left the top job in July,
2018, but stayed on as global ma-
naging partner emeritus until
Sept. 4 this year when Prime
Minister Justin Trudeau named
him as Canada’s new ambassa-
dor to China.
The New York Times and Wall
Street Journal cited unnamed
U.S. prosecutors in New York and
sources in the U.S. Justice Depart-
ment, who said that McKinsey &
Co. is the subject of a probe over
whether it broke Chapter 11
bankruptcy rules. This includes,
according to the New York
Times, whether McKinsey “quiet-
ly steered valuable assets to itself
or favoured its own clients over
other creditors.”U.S. Justice Department spo-
kesperson Nichole Navas Oxman
declined to comment on media
reports about a criminal investi-
gation into McKinsey and Co.
The office of Foreign Affairs Min-
ister Chrystia Freeland declined
to say whether she is concerned
about this probe.
Court battles over bankruptcy
cases have cost McKinsey & Co.
millions of dollars in penalties
imposed by the U.S. bankruptcy
watchdog including a US$15-mil-
lion settlement in February over
“disclosure deficiencies.” Late
last year, McKinsey & Co. paid
another US$17.5-million in a
bankruptcy case involving re-
newable energy company SunE-
dison and promised to improve
its disclosure protocols.
MCKINSEY, B6McKinsey&Co.underinvestigationforwork
advisingbankruptcompanies,reportssay
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