Industrial Bias

With a strong and deliberate focus on the industrial sector

Understanding the Landscape

In Canada, the industrial sector, particularly manufacturing, presents both challenges and opportunities for investors. The manufacturing sector contributed $195 billion to Canada’s GDP in 2022, representing 9% of the total output and employing 1.7 million workers. However, macroeconomic risks such as rising interest rates (with the Bank of Canada policy rate reaching 5% in November 2023) and weaker demand outlooks create hurdles for manufacturers

Key Investment Areas

  • Emerging Sectors: High-growth potential exists in areas like battery manufacturing (25% export growth projected for 2025) and adhesive manufacturing (105.7% export growth).
  • Technological Innovation: Investments in automation, AI (including AI adoption to optimize production processes), and clean technology offer opportunities to enhance productivity and competitiveness. The government offers incentives such as the Clean Technology Manufacturing Investment Tax Credit (introduced in 2023) to encourage adoption.
  •  Infrastructure: Significant government investment through initiatives like the Investing in Canada Pension Plan ($180 billion over 12 years) is driving growth in heavy engineering construction (projected to total $72.7 billion in revenue in 2025) and related infrastructure development. 

To achieve a unique identity and maximize impact, consider

  • Focus on Specific Verticals: Specialize in emerging industrial subsectors or technologies with high growth potential, for instance, battery technology, cleantech, or Industry 4.0 solutions, to differentiate from general industrial funds.
  • Emphasize Sustainability: Integrate ESG factors, prioritizing investments in environmentally responsible and ethically sound companies.
  •  Long-Term Value Creation: Adopt a long-term investment horizon, supporting companies with a clear vision for sustainable growth and positive societal impact.
  • Leverage Government Incentives: Utilize programs like the Strategic Innovation Fund or the Clean Small Business Venture Capital Tax Credit to boost returns and mitigate investment risks.
  • Active Partnerships: Collaborate with industry associations, government agencies, and research institutions to gain insights, access resources, and enhance portfolio company growth.

Main Industrial Bias Fund

Woodcraft

An alternate industrial fund is just lika a mutual fund (minus the liquidity and other factors) or exchange-traded fund (ETF) that invests primarily in companies from the industrial sector—including:

  • Construction
  • Machinery
  • Aerospace and defense
  • Manufacturing
  • Transportation
  • Engineering services

These funds focus on industries that produce goods used in construction, manufacturing, and infrastructure.

Fibre Optics

Fibre optic manufacturers and infrastructure providers can be part of industrial sector funds, especially if they Manufacture fibre optic cables, connectors, sensors, or networking hardware and Support industrial automation, factory networking, or infrastructure projects.

Many fibre optics companies are considered technology sector—especially if they focus on: Telecommunications infrastructure, Optical networking and High-speed internet system.

Commercial Production

Commercial production generally refers to large-scale manufacturing or production of goods intended for sale in the market. This includes:

  • Automobile manufacturing
  • Steel and cement production
  • Food processing
  • Chemical production
  • Machinery and equipment manufacturing
  • Electronics assembly
  • Construction materials
  • Packaging products

Let’s talk

Please contact us to learn more about Blumont, our various investment and corporate finance opportunities.