Layan Odeh of Bloomberg reports Canadian pensions target Europe as Trump shakes up world order:

 Canada’s biggest pension funds increased their ownership of United States assets in recent years to tap into strong economic growth. U.S. President Donald Trump’s agenda now has some eyeing Europe as an attractive spot for capital.

Trump has launched a global trade war without precedent, imposing 10 per cent tariffs on dozens of countries and putting 145 per cent levies on goods from China, while also upending longstanding security and trade alliances with European nations and other allies, including Canada. That has forced countries like Germany to ramp up spending on defence and other areas, which may buoy Europe’s economic prospects over the long run — even if there’s a high level of economic uncertainty today.

“I think there’s been some interesting reinvigoration of the range of possibilities and outcomes that could happen in Europe,” Aaron Bennett, chief investment officer of Ontario’s University Pension Plan (UPP), said. As the continent’s economy moves from “relatively slow growth to higher growth,” certain asset classes may become more appealing, such as infrastructure, real estate and private credit, he said.

UPP is exploring corners of private credit in Europe that are “less tapped and less accessible” by larger funds, said Bennett, whose pension oversees $11.7 billion of assets. He said UPP’s investment team is thinking about certain parts of the asset-backed lending sphere, such as real estate.

Ontario Teachers’ Pension Plan is also hunting for opportunities in Europe, chief executive Jo Taylor said recently.

“I quite like the idea of being brave and bold and investing in areas where other people don’t want to go because that means there’s less competition and potentially the chance to make better choices at lower prices,” he said. “We are looking at places in Europe to invest across all of our asset categories.”

The Teachers’ plan is one of Canada’s largest, with $266.3 billion under management as of the end of December. It had 33 per cent of its assets in the U.S. and 17 per cent in Europe, the Middle East and Africa.

Though private credit has been around for a long time, its growth has been so rapid in recent years — it’s now worth some US$1.6 trillion globally — that parts of it have yet to go through a full credit cycle, UPP’s Bennett said.

“There’s a lot of segments where a lot of capital is rushed into it, but there’s also segments where we’re seeing ongoing fragmentation and really interesting opportunities,” he said.

Established in 2021, UPP serves more than 41,000 working and retired members across five Ontario universities and 14 sector organizations, according to its website. About 42 per cent of the fund’s portfolio was allocated to fixed income as of the end of 2023, while public equities made up around 34 per cent of the portfolio. Private equity and private debt comprised 5.6 per cent and 6.8 per cent, respectively.

Alright, I'll keep my comments short as I've already covered a lot of this in a previous comment on how Canada's $2 trillion pension giants are struggling with Trump's policies.

First, Aaron Bennett, CIO of Ontario’s University Pension Plan (UPP), notes:

“I think there’s been some interesting reinvigoration of the range of possibilities and outcomes that could happen in Europe,”  As the continent’s economy moves from “relatively slow growth to higher growth,” certain asset classes may become more appealing, such as infrastructure, real estate and private credit, he said. 

What is going on in Europe? Germany’s upper house of parliament recently passed debt reform, €500-billion fund:

Germany’s upper house of parliament on Friday passed a reform of the country’s borrowing rules and a €500-billion ($542-billion) fund to revamp its infrastructure and revive Europe’s largest economy.

The constitutional amendment to loosen the so-called debt brake also allows for de-facto unlimited spending on defence and security.

The upper house of parliament, which represents the 16 German states, passed the bill with the necessary two-thirds majority after Tuesday’s vote in the lower house, the Bundestag.

The conservatives and the SPD party, who are in talks to form a centrist coalition after last month’s election, worked to pass the legislation through the outgoing parliament for fear it could be blocked by far-right and far-left lawmakers in the next Bundestag starting March 25.

Chancellor-in-waiting Friedrich Merz has defended the tight timetable, which angered fringe opposition parties, by pointing to a rapidly changing geopolitical situation.

What this means is Europe led by Germany got the message from Trump, you're on your own and they are spending billions to beef up their infrastructure, defence and security.

Typically in asset management, you want to go overweight regions where fiscal expansion is strong and underweight regions where there's fiscal retrenchment.

Just based on this, you start to understand why money is gravitating away from the US toward Europe this year.

Add to this heightened policy uncertainty because of the tariffs, the way they were rolled out and the continuous mixed signals, and you exacerbate this trend toward Europe and other more stable countries. 

In terms of asset classes, every one of them will benefit but I agree with UPP's CIO, Aaron Bennett, infrastructure, real estate and private credit will be particularly attractive in Europe.

OTPP's CEO Jo Taylor was even more broad: “We are looking at places in Europe to invest across all of our asset categories.” 

Now, a note of caution. 

Trump or no Trump, the US will always remain the engine of global growth and there will always be a strong presence there from Canada's large pension funds.

What is going on in the US now is most unfortunate, Trump is wrecking his own economic agenda and sending the wrong signals domestically and internationally. 

Will this continue for four years? I strongly doubt it will continue for four more weeks. 

This is why I take all the negativity on US assets and the greenback with a grain of salt, it's a bit overdone in my humble opinion.

Is recession a possibility? Yes, for sure, a recent survey shows more than 60% of CEOs expect a recession in the next 6 months as tariff turmoil grows, and there are plenty of reasons to be concerned.

On Sunday, Bridgewater founder Ray Dalio said he's worried about 'something worse than a recession':

Dalio said five forces drive history: the economy, internal political conflict, the international order, technology, and acts of nature such as floods and pandemics. Trump’s tariffs have understandable goals, Dalio said, but they are being implemented in a “very disruptive” way that creates global conflict.

Here's the beautiful thing about the United States, there are checks and balances, midterms are coming next year, Trump will lose momentum if he continues on this path.

But Ray Dalio is right, they need to tackle major deficits and they need to get heir act together fast.

Below, Ray Dalio, founder of the world’s largest hedge fund, tells Meet the Press that Trump’s economic agenda could lead to a “breaking down of the monetary order” as the president ramps up tariffs on China.

Next, CNN’s Fareed Zakaria, host of “Fareed Zakaria GPS,” shares his take on developments surrounding President Donald Trump’s tariff policies, and why he thinks it’s “getting dirtier fast.”

Third, Scott Galloway, an entrepreneur, NYU professor and co-host of “Prof G Markets” podcast, joins ABC's The View to weigh in on President Donald Trump’s tariffs and makes the case for outsourcing goods (my wife suggested this to me, it aired right before exemptions this weekend).

Fourth, Janet Yellen, former Treasury Secretary, joins 'Squawk Box' to discuss her thoughts on the current tariff regime, if colleagues are calling her to make sense of the moment, and the bond market's reaction to recent news.

Lastly, Treasury Secretary Scott Bessent played down the recent selloff in the bond market, rejecting speculation that foreign nations were dumping their holdings of US Treasuries, while flagging that his department has tools to address dislocation if needed. “I don’t think there’s a dumping” by foreign investors, Bessent said in an interview Monday with Bloomberg Television while on a visit to Buenos Aires, Argentina. He pointed to what he said was increased foreign demand at auctions for 10-year and 30-year Treasury securities last week.

Bessent reiterated his interpretation of the decline being mainly a product of deleveraging. “I have no evidence that it’s sovereigns” behind the drop, he said. “We are a long way” from needing to take action, he said. But “we have a big toolkit that we can roll out” if so. Included in that toolkit is the department’s buyback program for older securities, Bessent said. “We could up the buybacks if we wanted.” Treasuries saw their biggest weekly slide since 2001 last week, alongside a decline in the dollar — which some market participants highlighted as a sign of diminishing international confidence in American assets.

Hakyung Kim and Pia Singh of CNBC report Dow jumps 600 points Friday, capping one of the most volatile weeks on Wall Street ever:

Stocks climbed Friday as Wall Street wrapped up a historically wild week.

The S&P 500 advanced 1.81% to end at 5,363.36. The Dow Jones Industrial Average rose 619.05 points, or 1.56%, and closed at 40,212.71. The Nasdaq Composite climbed 2.06% to settle at 16,724.46.

Stocks took a leg higher Friday afternoon on comments from the White House that President Donald Trump is “optimistic” China will seek a deal with the U.S.

This week has been one of the most volatile periods on record for Wall Street. The major averages tumbled Thursday as traders went into risk-off mode, with trade policy uncertainty weighing on sentiment. Stocks lost a chunk of the historic gains seen on Wednesday after Trump announced a 90-day reprieve on some of his high “reciprocal” tariffs.

The S&P 500 fell 3.46% on Thursday, while the 30-stock Dow tumbled 1,014.79 points, or 2.5%. The tech-heavy Nasdaq ended the day lower by 4.31%. On Wednesday, the S&P 500 rallied 9.52% for its third-largest gain in a single day since World War II, while the 30-stock Dow skyrocketed more than 2,900 points.

The CBOE Volatility Index, known as the Vix, earlier in the week spiked above 50 before dropping to about 37 as of Friday afternoon.

The Trump Administration has opted for a universal tariff rate of 10% — except for China. Goods from Beijing will see a rate of 145%, a White House official confirmed to CNBC on Thursday.

China on Friday retaliated by raising its levies on U.S. products to 125% from 84%. “Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the Chinese finance ministry said in a statement, according to a CNBC translation.

Meanwhile, the European Union said its trade representative was flying to Washington on Sunday to “try and sign deals.”

“We remain in the early innings of this global trade regime change, and while the 90-day pause on reciprocal tariffs temporarily reversed the market selloff, it does prolong uncertainty,” Wells Fargo Investment Institute president Darrell Cronk wrote in a note on Friday.

Here are the U.S. tariffs currently in place:

• 145% duty on all goods from China
•  25% tariffs targeting aluminum, autos and goods from Canada and Mexico not under the United States-Mexico-Canada Agreement 
• 10% levy on all other imports

Despite the tumultuous week, the three major averages notched solid gains in the period. The S&P 500 posted a 5.7% advance for its best week since November 2023. The Nasdaq rose 7.3% during the week for its best performance since November 2022. The Dow gained nearly 5% over the week.

To be sure, the major averages remain sharply lower since April 2, when the White House announced so-called reciprocal tariffs on goods from other countries. Since then, the S&P 500 is down more than 5%.

The latest consumer sentiment numbers for April came in worse than expected. The expected inflation level also surged to its highest level since 1981, according to the University of Michigan survey on consumers  

A tumultuous week indeed, it's Friday and it was another insanely volatile week.

A friend of mine remarked: "It's crazy that one guy can move the US stock market like a yo-yo." 

This is how wacky things have gotten, algos, traders and investors all hanging on to every post President Trump puts on his social media platform, Truth Social.

Things are so chaotic, it reminds me a bit of Trump 1.0 when I met up with a trader who worked for Izzy Englander's Millennium hedge fund and he was telling me back then they had algos tracking everything Trump tweeted about. 

I'm paraphrasing but he said something like this to me: "Everything Trump tweets about comes true, we are using his tweets to adjust our trades accordingly in real time."

Whatever! If you ask me, most investors are fed up of Trump's posts and probably miss "sleepy Joe Biden."

Before I get to Trump's obsession with tariffs, how they recklessly rolled out these tariffs, and how he needs to walk them all back, let me quickly discuss the action on Wednesday as it was a major reversal.

In his weekly market wrap-up, Not Out of The Woods But...,  Martin Roberge of Canaccord Genuity writes:

Thanks to a 9.5% surge on Wednesday (the third biggest daily gain post-WWII) after President Trump announced a 90-day pause on the reciprocal tariff rate for most countries, the S&P 500 is up ~5% for the week. Investors’ nervousness remains, however, as concerns appear to be shifting from tariffs to the US$ and the bond market which seem to have lost their safe-haven attributes. Growth, inflation, and deficit concerns are such that foreign investors’ confidence on US assets is waning. Also, whether this is a retaliation move or not, market speculation is circulating that the two biggest holders of US Treasuries, Japan and China, have been liquidating positions. In the case of Japan, it is not speculation since it sold ¥2.6T worth of foreign bonds (likely US Treasuries) last week, the third-largest weekly sale over the last 10 years. If it is proven that China is also using this financial weapon, the White House and the Federal Reserve will have to get their act together as they may have to implement a yield curve control to cap US Treasury bond yields. In fact, this could be what gold is sniffing, surging ~$200/oz this week.

Our focus this week is on Wednesday’s jump of 9.5% on the S&P 500. Obviously, such a rally could mark the end of the ongoing correction/bear market. We cannot rule out this scenario since we are likely past peak tariff and peak retaliation risk, in our view. Also, investors could argue that financial markets have finally found the Trump-Bessent put around -20% on the S&P 500 and 4.5% on 10Y Treasury bond yields. That being said, our Chart of the Week shows the average trajectory around the Top-10 daily returns on the S&P 500 with the April 9 close rebased to 100. Here are some key observations. First, the rebound from the April 8th low (4,983) could take the S&P 500 all the way up to the ~5,500 region. Thereafter, a retest of the April 8 low would be likely. Indeed, while not shown by the pattern, we note that in 7 out of the 10 occurrences, the S&P 500 retested and broke below the starting point of the rally over the following six months. Then, if history is any guide, the S&P 500 would put in a sustained bottom in July/August. In all, while the 90-day pause on reciprocal tariffs comes as good news for the stock market, our analysis of the biggest historical 1-day surge on the S&P 500 suggests that a market bottom is a volatile process with high odds that the S&P 500 retests its April 8 low and possibly makes new lows. Encouragingly, however, the confirmation that Washington is sensitive to financial markets is such that a severe bear market like in 2000-02 and 2008-09 has become a much lower probability, in our view.

Is Martin Roberge right, will the S&P 500 retest its April 8th low sometime in July/ August and possibly go lower?

The answer is nobody knows, it all depends on policy uncertainty and whether Trump walks back the tariffs in a meaningful way. 

One thing is for sure, it will be volatile until markets get a firm sense of what is happening with tariffs, whether or not the US economy slips into a recession and whether long-term inflation expectations start rising significantly. 

There are a lot of moving parts here but I believe it's safe to assume we have reached peak policy uncertainty:

Literally off the charts, no further comments necessary pic.twitter.com/As70Iob5rv

— Michael A. Arouet (@MichaelAArouet) April 10, 2025

Of course, with Trump you never know, he keeps digging in his heels on tariffs and has an obvious beef with China.

Apart from peak policy uncertainty, there may be another reason to be bullish here, sentiment is so depressed as American consumer sentiment has dropped to the second lowest level since 1952 (pandemic was slightly worst):

american consumer sentiment drops to second lowest level since 1952
(pandemic was slightly worse)

-university of michigan pic.twitter.com/CVWGaLYDqg

— ian bremmer (@ianbremmer) April 11, 2025

Typically you want to buy stocks when everyone is depressed, anxious, worried about losing their job and savings.

However, it can get worse if unemployment starts soaring along with inflation, so it's hardly a given that sentiment can't deteriorate further.

On top of consumer sentiment, there's also international investor sentiment which seems to be factoring in here.

Lots of talk this week how sovereigns led by Japan and China are selling US Treasuries which is why you saw yields spike and the US dollar tumble:

Typically when US long bond yields go up (because of strong growth), the US dollar rallies but this isn't he case now, yields spiked because of policy uncertainty, raising the term premium.

 Are foreign central banks and institutional investors really selling Treasuries and US assets?

And what are they buying? More gold?

I don't know, a week or two doesn't make a long-term trend but clearly the bond market got wacky this week and scared Trump into announcing a 90-day pause in tariffs with a baseline tariff of 10% for almost all countries except China (Canada and Mexico are still subject to 25% tariffs on goods that don’t comply with the U.S.-Mexico-Canada Agreement).

In fact, the bond market selloff was 'severe' as long-term yields notched their biggest week since 1982:

The bond market sell-off escalated Friday to cap off one of the most volatile and unusual trading weeks in recent memory as President Trump's tariff whipsaw sent yields surging and investors fled safe haven assets.

Long-term Treasury yields skyrocketed, with the 10-year yield (^TNX) surging to its highest level since February to trade as high as 4.59%, a massive 72 basis point swing from Monday's low of 3.87%. Shortly after the closing bell, yields pulled back to around 4.49%.

According to data compiled by Yahoo Finance, the 10-year has logged its biggest week since November 2001.

Similarly, the 30-year yield (^TYX) jumped 3 basis points to trade near 4.88% — the highest level since January but the biggest weekly surge for the 30-year yield since 1982.

According to the FT, liquidity has worsened in the $29tn Treasury market as volatility soars:

“There is real pressure across the globe to sell Treasuries and corporate bonds if you are a foreign holder,” said Peter Tchir, head of US macro strategy at Academy Securities. “There is a real global concern that they don’t know where Trump is going.” 

 “We are concerned because the movements you see point to something else other than a normal sell-off,” said a European bank executive in prime services, a division that facilitates leveraged trading for firms including proprietary traders and hedge funds. “They point to a complete loss of faith in the strongest bond market in the world.” 

Traders said poor liquidity — the ease with which investors can buy and sell Treasuries without moving prices — was exacerbating market moves. 

Analysts at JPMorgan said market depth, a measure of the market’s ability to absorb large trades without significant shifts in price, had significantly worsened this week, meaning even small trades were moving yields significantly.

All this bond market volatility makes investors very nervous.

Will the Fed be forced to intervene? Too soon to jump to that conclusion.

Lastly, and more problematic, why is President Trump so dead set on tariffs and why did he take out the sledgehammer to coerce deals?

Perhaps because he knows he doesn't have much time to reset global trade according to his vision so he's in a rush to show Americans this is the right course of action.

But the approach has been so reckless, so wrong on so many levels that he risks throwing the US economy into a recession and risks wiping out the Republican majority in the House when midterms roll around in two years.

Trump's obsession with tariffs is baffling and it’s frightening that he refuses to see how this is the biggest policy error since Smoot-Hawley.

Equally disturbing when Treasury Secretary Scott Bessent says ‘it’s Main Street’s turn’ after Wall Street grew wealthy for 4 decades or when trade advisor Peter Navarro says the stock market plunge is 'no big deal'.

What planet do these people live on? Bessent knows a crisis on Wall Street will  hit Main Street hard and Navarro who apparently has a PhD in Economics from Harvard needs to brush up on his macro to see how confidence drives everything and stocks plunging because of erratic trade policies  is very much a big deal.

Alright, let me wrap it up there, here are this week's top-performing sectors and large cap stocks:

 

It was quite a week, one that many traders and investors will never forget.

Below, Neel Kashkari, Federal Reserve Bank of Minneapolis president and CEO, joins 'Squawk Box' to discuss how Kashkari is feeling about the economy, what's happening in the 'financial plumbing', and the most recent CPI data.

Next, Krishna Guha, Evercore ISI vice chairman, joins 'Closing Bell Overtime' to talk what the dollar sinking and bond yields rising signals about global markets.

Third, Subadra Rajappa, Societe Generale head of US rates strategy, joins 'Fast Money' to talk worrying trends in the U.S. bond market.

Fourth, Mark Newton, Fundstrat global head of technical strategy, joins 'Squawk Box' to discuss if there's been underlying damage done to equity markets in recent days, what to expect from market performance, and much more.

Fifth, Tom Lee, Fundstrat, joins 'Closing Bell' to discuss the market consolidation, whether this is a market to get into and where he expects to see stock rebound.

Sixth, Larry Fink, BlackRock chairman and CEO, joins CNBC's 'Squawk on the Street' to discuss how he's thinking about US recession odds, trade relations, and more.

Seventh, PMorgan Chase Chairman and CEO Jamie Dimon talks tariffs, the future of US trade and competition, earnings expectations, recession likelihood and more in an exclusive interview on Fox 'Mornings with Maria'.

Lastly, Trump "buckled" when the markets looked bad but maintains "the full on trade war" with China which will ultimately "bleed" American industry, says economist and former Minister of Finance in Greece Yanis Varoufakis.

BCI announced today a significant minority equity stake in Broadstreet Partners:

On April 10, 2025, BroadStreet Partners (the “Company”) announced that BCI, Ethos Capital, and White Mountains Insurance Group, Ltd. will acquire a co-control ownership position in the Company, alongside current investor, Ontario Teachers’ Pension Plan.

“BroadStreet is a marquee insurance brokerage platform with a differentiated agency partnership strategy that drives sustainable long-term growth with entrepreneurial ‘Core Partners’ across North America,” said Derrick Estes, Senior Managing Director, Private Equity at BCI (featured above). “BCI’s investment demonstrates our confidence in the BroadStreet strategy, their experienced management team, and the organic and inorganic growth opportunities ahead. We’re pleased to co-invest alongside our partner, Ethos Capital, and prominent insurance specialist, White Mountains, to support BroadStreet in driving future growth.”

Learn more about this investment in the BroadStreet news release.

The news release states Ethos Capital, BCI, and White Mountains will partner with BroadStreet and Ontario Teachers' to drive the next chapter of growth:

COLUMBUS, Ohio & BOSTON & TORONTO--(BUSINESS WIRE)--BroadStreet Partners (“BroadStreet” or the “Company”), a leading North American insurance brokerage company, announced today that an investor group led by Ethos Capital (“Ethos”), British Columbia Investment Management Corporation (“BCI”), and White Mountains Insurance Group, Ltd. (“White Mountains”), will acquire an ownership position in BroadStreet. Under the terms of the agreement, Ontario Teachers’ Pension Plan (“Ontario Teachers’”) will maintain a significant co-control stake and operate in partnership with the Ethos-led investor group.

BroadStreet is a leading middle-market insurance brokerage focused on commercial and personal property & casualty and employee benefits. BroadStreet partners with leading independent insurance agencies, known as Core Agency Partners. Complementing its M&A capabilities and capital solutions, the Company provides a vast network of market resources, tools, and expertise to its Core Agency Partners, working alongside them to drive organic growth and improve agency performance.

BroadStreet is unique in the market because of its co-ownership model with more than 800 colleagues that own equity in their local Core Agencies. The co-ownership approach creates focused alignment between BroadStreet and its Core Agency Partners around growth and value creation. The partnership with Ethos and its co-investors will support BroadStreet’s long-term plans, including its continued investment in technology and digital transformation.

Mike O’Connor, Chief Executive Officer, BroadStreet said: “BroadStreet is uniquely positioned as the partner of choice for successful entrepreneurs seeking new avenues for growth. Our differentiated co-ownership model and proven strategy empower our 30 Core Agency Partners to scale their businesses with confidence. For over a decade, the Ontario Teachers’ team has been a value-added partner to us. We are excited to continue this collaboration and now join forces with Ethos, BCI, and White Mountains, leveraging their collective expertise to enhance our capabilities and drive sustained growth.”

Rick Miley, Founder and Board Member, BroadStreet said: “We are proud of the tremendous growth that we have achieved on our journey over the last dozen years with the support of Ontario Teachers’. We now look forward to continuing and strengthening that partnership with the addition of the new Ethos-led investor group. We see tremendous value in being able to tap into the combined expertise of the Ontario Teachers’ and Ethos-led teams to the benefit of our Core Agency leaders. By coming together, BroadStreet is taking a significant step forward on our mission to become the preferred home for premier insurance agencies in North America.”

Ethos Capital invests in seasoned companies like BroadStreet, with proven business models and management teams, which are ready for accelerated growth, sustainable long-term value creation, and enhanced performance. The firm’s unique Executive Partner model pairs experienced investors and industry practitioners with the leaders of its portfolio companies, partnering in their growth.

Brent Stone, Managing Partner, Ethos Capital said: “BroadStreet has developed a highly differentiated business model – consistently building its expertise and scale through its industry network and a growing set of Core Agency Partners. Our Ethos leadership team and co-investors have significant experience in accelerating growth and long-term value creation for high-performance companies including in the insurance sector. We look forward to partnering with an executive of Mike’s caliber and his team to pursue their future growth ambitions.”

Ontario Teachers’ acquired a majority stake in BroadStreet in 2012 and has taken an active role in supporting the organization’s growth by focusing on long-term value creation. Under its ownership, BroadStreet has meaningfully scaled the business and become one of the top private brokerages in North America, with a presence in all 50 U.S. states and all 10 Canadian provinces. The business has consistently delivered strong operational performance by leveraging its extensive local relationships and nationwide expertise.

Jeff Markusson, Senior Managing Director, Private Capital, Ontario Teachers’ and BroadStreet Board Member commented: “BroadStreet has experienced tremendous growth as a result of its unique co-ownership model and strong management team. As we continue to focus on creating long-term value at BroadStreet, we are delighted to bring in like-minded partners with a proven track record in the insurance industry. Ethos and its co-investors share our vision of growing BroadStreet into the premier insurance brokerage company in North America by capitalizing on sectoral tailwinds and accelerating both organic and inorganic growth efforts.”

Ardea Partners served as lead financial advisor to Ontario Teachers’ and BroadStreet, and RBC Capital Markets and BMO Capital Markets served as co-advisors. Latham & Watkins LLP and Torys LLP served as legal counsel to Ontario Teachers’ and BroadStreet. Kirkland & Ellis LLP served as legal counsel to Ethos Capital. Debevoise & Plimpton LLP served as legal counsel to BCI. Cravath, Swaine & Moore LLP served as legal counsel to White Mountains.

About BroadStreet Partners

BroadStreet Partners is an insurance brokerage company headquartered in Columbus, Ohio. The Company invests in select, entrepreneurial, high-performing independent agencies looking for capital support and partnership. With 30 Core Agency Partners, BroadStreet provides ownership opportunities for more than 800 agency professionals across the U.S. and Canada. The company is a top North American private brokerage firm according to Insurance Journal's 2024 Top Property/Casualty Agencies. www.broadstreetcorp.com

About Ethos Capital

Ethos Capital is a global investment firm that makes majority and minority control investments in middle-market companies, primarily across North America and Europe. The firm’s 21 Executive Partners collaborate with its portfolio companies, providing them with a network of resources and expertise to strategically enhance operations and accelerate their growth. For more information, visit www.ethoscapital.com.

About Ontario Teachers’

Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $266.3 billion as of December 31, 2024. Ontario Teachers’ is a fully funded defined benefit pension plan, and it invests in a broad array of asset classes to deliver retirement security for 343,000 working members and pensioners. For more information, visit otpp.com and follow us on LinkedIn.

About BCI

British Columbia Investment Management Corporation (BCI) is amongst the largest institutional investors in Canada, with C$250.4 billion in gross assets under management as of March 31, 2024. Based in Victoria, British Columbia, with offices in Vancouver, New York, and London, U.K., BCI manages a portfolio of diversified public and private market investments on behalf of its British Columbia pension fund and institutional clients.

BCI Private Equity actively manages a C$31 billion global portfolio of privately held companies and funds with the potential for long-term growth and value creation. Leveraging sector-focused teams in financial services, business services, consumer, healthcare, industrials, technology, media and telecommunications, BCI works with strategic private equity partners to source and manage direct and co-sponsor/co-investment opportunities. Learn more at www.bci.ca.

About White Mountains

White Mountains Insurance Group, Ltd. (NYSE: WTM) is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbols WTM and WTM.BH, respectively. Additional financial information and other items of interest are available at the company's web site located at www.whitemountains.com.

OTPP put out the same press release here.

Before I share my thoughts, it's worth going back to February 2012 when OTPP announced it acquired a majority interest in BroadStreet:

TORONTO - Ontario Teachers' Pension Plan (Teachers'), through its private investment department, Teachers' Private Capital (TPC), today announced that it has entered into a definitive agreement for the acquisition of a majority interest in BroadStreet Capital Partners (BroadStreet), a U.S. holding company that makes majority interest investments in high-performing independent insurance agencies.

Together with Century Capital Partners (Century), Teachers' will acquire approximately 84 percent of BroadStreet from State Automobile Mutual Insurance Company (State Auto).  The remaining share of the company will be retained by State Auto and BroadStreet CEO Rick Miley. In addition to their initial equity investment, Teachers' and Century have committed to provide follow-on capital to support future investments by BroadStreet in the United States. Terms of the transaction are not being disclosed.

Based in Columbus, Ohio, BroadStreet is focused on the middle-market retail insurance brokerage industry in both commercial and personal P&C insurance. With its partner agencies, BroadStreet ranks among the top insurance agencies in the U.S., with annual revenue in excess of $100 million.

"BroadStreet has developed an attractive business model and a proven ability to create value in a highly fragmented market," said Jane Rowe, Senior Vice-President, TPC. "With our partners Century, we look forward to supporting BroadStreet's strong leadership team as it continues to pursue attractive growth opportunities."

"In BroadStreet we are pleased to be able to back a management team of the highest calibre in a sector we believe has enormous growth potential," said Davis Fulkerson, Managing Partner at Century Capital.

"We are very pleased to have the support of investors of the quality of Teachers' and Century, as well as the on-going support of our founding partner State Auto," said BroadStreet CEO Rick Miley.  "We look forward to working together to continue BroadStreet's track record of successful growth."

In May 2020, Century Focused Fund III exited its investment in BroadStreet via a recapitalization of the business, leaving OTPP as the majority owner of the business.

According to Century:

BroadStreet Partners is a diversified commercial and personal insurance brokerage business. The company has a unique acquisition strategy through which they acquire a majority interest in “core” agencies, allowing the agency management team to maintain an equity interest in the business post-transaction. 

That's a big differentiator and as stated in the press release:

BroadStreet is unique in the market because of its co-ownership model with more than 800 colleagues that own equity in their local Core Agencies. The co-ownership approach creates focused alignment between BroadStreet and its Core Agency Partners around growth and value creation. The partnership with Ethos and its co-investors will support BroadStreet’s long-term plans, including its continued investment in technology and digital transformation. 

This reminds me a little bit of Pete Stavros at KKR forging a new path for capitalism giving employees an equity stake. 

Look at this from BroadStreet's website:

That last point is worth repeating: "BroadStreet’s majority owner is a pension plan (OTPP), which has a uniquely long investment horizon and allows us to build a sustainable business."

The press release states "Ontario Teachers' will maintain a significant co-control stake and operate in partnership with the Ethos-led investor group."

Teachers' Private Capital has made significant investments in financial services: property and casualty insurance, asset and wealth management, consumer finance, commercial finance, financial technology and services businesses.

It's basically a leader investing in private insurance companies as is CDPQ.

Great insurance businesses are great assets to own over the long run, just ask the Oracle of Omaha.

Alright, let me wrap things up.

Before I forget, BCI recently announced it is supporting Blackstone in Rogers Communication infrastructure JV

“BCI is pleased to support Blackstone through partially funding their equity investment in the new Rogers Communications joint venture subsidiary holding backhaul network infrastructure,” said Daniel Garant, Executive Vice President & Global Head, Public Markets, at BCI. “Rogers is a longstanding and respected Canadian company, with a strong network of telecommunications infrastructure. Blackstone’s equity investment will ultimately enable Rogers to unlock greater value from their existing assets.”

Read more about the consortium’s investment in Rogers here

Also, BCI recently posted this on LinkedIn:

Ramy Rayes, BCI’s Executive Vice President of Investment Strategy and Risk, recently shared insights in an interview about our new mandate to oversee $2 billion for the Four Pillars Society. This not-for-profit organization represents the financial interests of 325 First Nations across Canada.

This significant mandate is part of a $2.8 billion settlement fund granted by the Government of Canada to address the loss of culture and language rights due to residential schools. The Four Pillars Society has entrusted BCI with the stewardship of these funds, marking a momentous milestone in the management of Indigenous capital in Canada.

At BCI, we are committed to growing and safeguarding these collective assets with our total portfolio approach, in-house asset management capabilities, and responsible investment leadership.

Read the full article to learn more about this important partnership here.

That's a wrap. 

Below, Peter Berezin, BCA's Chief Global Strategist, joins 'Fast Money' to talk how trade concerns continue to pressure markets. I highly suggest you follow Peter on X here.

Also, Josh Brown, CEO of Ritholtz Wealth Management, joins CNBC's "Halftime Report" to share his view on the volatility in the market right now.