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Citco joins influx of hedge funds locating in Halifax

Date: Tuesday, November 21, 2006
Author: Peter Moreira, Special tothe Globe and Mail

HALIFAX -- Citco Group Ltd., one of the world's largest hedge fund administrators, will announce today it is opening an office in Halifax with plans to eventually employ about 350 people.

The operation will include the fund administrator's North American training centre, the Bermuda-based company is expected to say. A person familiar with the situation said the average salary at the Halifax office would be "just shy of double the local average" of about $28,000 a year.

Citco is the latest Bermudan financial company to announce it is opening an office in Halifax, taking advantage of the ample university-educated work force and costs lower than those found in Bermuda.

Last Wednesday, Bermuda-based Bank of N.T. Butterfield & Sons Ltd. said its fund services unit would hire about 400 people in Halifax within the next seven years. And last year, fixed-income fund manager West End Capital Management agreed to locate 75 positions in Halifax.

Sources said last week that hedge fund Olympia Capital International Inc. plans to open an office that will hire about 150 people in Halifax, and that hiring commitments by Bermudan financial companies will soon reach almost 1,000 jobs.

"We see Halifax as a strategic centre to develop our Canadian operations," William Keunen, global director of Citco Fund Services, said in the draft of a news release. "With Nova Scotia's education infrastructure and competitive advantages, we know it is the right place for our new office and training centre." Citco has operated in Canada since 1992, and now employs about 350 people in Toronto.

Nova Scotia Business Inc., the provincial agency charged with attracting businesses to Nova Scotia, has agreed to pay Citco a payroll rebate of as much as $7-million over the next seven years if it meets its employment targets. NSBI last week agreed to pay Butterfield Bank a $9-million payroll rebate, but the agency's chief executive officer stressed that the Bermudan companies are not coming to Halifax simply because of the rebates.

"Incentives are critical in today's world, but it's secondary to talent," Stephen Lund told reporters last Wednesday, in describing the process of attracting businesses. "If you don't have the talent, you can just forget it."

NSBI and the province's universities are hoping the Bermudan companies will give the city a critical mass in the financial sector, which will encourage other fund administrators to establish offices here.

Two of Canada's five chartered banks, Royal Bank of Canada and Bank of Nova Scotia, trace their roots to Halifax. But in 1991, the city's largest financial company Central Trust Corp. shut down, and Maritime Life Co. was swallowed up two years ago by Manulife Financial Corp. when the Toronto-based insurer bought Maritime Life's Boston-based parent, John Hancock Financial Services Inc.