CFFI

"“John’s totally, 100 percent invested in long-term active assets,” CFFI president Stan Spavold explained. “Most of our investments are active, private, and in various stages between startup and mature. But most of them are in the early-stage development.”"

"“He would act like an investment house, owning companies but running them at arm’s length.” That’s similar to what Risley ended up doing with his many investments through CFFI and Northern Private Capital, the US $ 250-million private equity fund he co-founded in 2019."

"Risley argues his boats are primarily business tools, he does declare a personal benefit for tax purposes, based on what he perceives to be the value of his personal use of the vessels. However, as Spavold noted, the opinion of the Canada Revenue Agency doesn’t always align with that of CFFI. “Our position is a little more aggressive because John works all the time when he’s on the yacht. John’s vacation is not a vacation like you or I take,” Spavold said. “We do declare a personal benefit and I’ll let CRA make its own argument.”"

"Risley was at this point—the mid-to late-1990s—still predominantly focused on the larger picture at Clearwater. A new company focused on omega-3 R and D would require a dedicated top executive, someone to help actualize Risley’s big-picture vision—someone to focus on the day-to-day, granular details that were of little interest to him. He found that operating partner when CFFI bought Laer Products, a company that had supplied omega-3 fish oils to the veterinary industry before going bankrupt. Risley tapped Laer’s general manager, Robert Orr, a former grocery executive, to build a team and create a new company, which was formally incorporated as Ocean Nutrition in March 1997."

"The deal, negotiated in early 2012, “propelled” Ocean Nutrition’s profits and value, provided surety of supply, and further added to the company’s global reach—offices in Europe and Shanghai, powder manufacturing in Wisconsin and Nova Scotia, and oil processing in Peru. The significance of adding the Peruvian business became evident on May 18, 2012, with DSM’s purchase of Ocean Nutrition for $ 540 million. (According to Risley, the final price was closer to $ 600 million by the time the deal closed two months later.) Just a year earlier, DSM had offered $ 320 million. The sale meant Richardson Capital had earned a 20-to 30 percent annualized rate of return on its first investment in Ocean Nutrition, and a 40-to 50 percent rate of return on its second investment. (Richardson had paid a total of $ 70 million for its 45 percent stake.) CFFI earned a 21 percent return on its investment, based on a gain of $ 210 million."

"A typical CFFI investment would be somewhere between $ 20 million and $ 100 million, much of it with borrowed money, thus an 8-to 12 percent return wouldn’t be sufficient to justify the borrowing costs. “We have to have a return of around 22 percent or higher to make sure we are covering all of the risk,” Spavold concluded."

"CFFI then bought out the other shareholders and owned the company outright. “John stuck with it to get the shareholders out. And that’s what he does, he takes care of his partners—even if it’s tougher for him. He got everyone’s money out,” Derrick Rowe said. “He put everyone else first—financially. That’s John. That’s why people do business with John.”"

"Details were scarce, but FPI would finance the acquisition by taking on $ 210 million in existing Clearwater debt and issuing millions of non-voting shares to Risley and Colin MacDonald, meaning they were giving up 100 percent of Clearwater to get non-voting shares in FPI. Risley would be CEO of the giant company and would reportedly hold (through CFFI) 60 percent of the combined common shares but still only about 15 percent of the preferred voting shares. “I will therefore have no more control over the company when the transaction is closed than I have today,” Risley declared. (Except he would also be running it.)"

"Building that network was expensive, however. Columbus’s expansion was funded with US $ 1.25 billion—including from banks like Citi, RBC, and Scotiabank, the largest retail bank in the Caribbean, as well as further investment from CFFI. During one cash call, Michael Lee-Chin found himself short on funds. “I didn’t have the liquidity then. So John said, ‘It’s OK, Mike, don’t worry—I’ll put it in. Pay me when you have the money.’"

"Risley also held investments through his controlling stake in Northern Private Capital (NPC), a US $ 250-million venture fund he started in 2018 with Andrew Lapham, a former Blackstone executive and son-in-law of former prime minister Brian Mulroney. CFFI is the biggest contributor to NPC, which like CFFI itself has investments in a wide range of companies, in allotments from $ 10–40 million. Among them: Aspire Food Group, which makes protein from insects, including crickets. The company was building what Risley said would be “the world’s largest and most efficient protein producing plant,” in London, ON; Taiga Motors, a Montréal startup that makes electric snowmobiles and personal watercraft (basically an electric Sea-Doo); Loop Industries, which says its technology can turn polyethylene terephthalate plastic and polyester fibre—which cannot be conventionally recycled—into high-value materials; MicroSintesis, a PEI company developing technology to help replace the use of antibiotics in pork and poultry production."

"Regardless of why it was launched, the IPO was a resounding triumph. It generated more than $ 271 million, of which Risley and MacDonald used roughly $ 130 million to pay off debt. That left them more than $ 100 million in CFFI, in addition to their remaining 55 percent stake in Clearwater."

"HPS, our long term lender, an offshoot of JP Morgan has a security interest in all our assets. We owe them [$ 150 million]. The relationship is a very good one and they allow us to move our assets around.... They also allow us to take enough money out of CFFI to pay all our obligations, dividends to me so I can pay Mum [Judi], Sarah and Michael their salaries/ allowances etc. Moving [$ 10 million] out from under their security blanket would be a problem and not something they would agree to absent some event [such as selling part of ClearBank to John Malone]. There is speculation I am using money to build a new yacht and my new house, money that could be directed to Mum. In fact that is not the case. I am financing the house with a mortgage and my deal with the shipyard allows me to pay in 3 years time, on delivery. So I hope this description of circumstances is helpful to you in appreciating why it is not possible for me to say on June 30th I will pay x. I am more than willing to transfer the Montana house or anything else which might give Mum better comfort that I intend to honour my obligations."

"“I actually own nothing. Everything I own is in the hands of trusts.... They already have it. They have the money now because the trusts own all of CFFI. I own nothing of CFFI. I work for the trusts,” he explained. “The whole thing is just bizarre. Nobody stops to think, ‘Well, OK, so you want to take, you know, five million or ten million out of one pocket and put it in another pocket.’ What have you accomplished?... And you try to make that argument [but] nobody listens. So anyway, very frustrating.”"