A Brief Glossary of Terms

Co-investment:

In general, the process by which several financial institutions and/or investors lower a transaction's cost and risk by pooling (or syndicating) their resources.

Collateral benefits (of investing):

Positive effects (e.g., in the economy) produced by an investment subordinate to financial returns.

Corporate governance:

The policies and practices associated with managing a business.

Debt (also known as credit or loans):

Financing offered by a lending institution, repayable with interest over an agreed-upon period of time.

Due diligence:

A comprehensive process by which a financial institution or investor evaluates a potential business client prior to completion of an investment agreement.

Economically-targeted investment (ETI):

An investment chosen (a.k.a., asset-targeting) for both its financial and economic return merits.

Employer-sponsored pension funds:

Funds based on the deferred wages of workers intended to provide income upon retirement. Statistics Canada uses this term to describe the universe of employment-based, occupational or workplace plans, the vast majority of which are trusted. In fact, the sponsors of many pension plans are both employers and employees.

Equity capital:

Financing offered by an institution or investor in private or public markets that entails some degree of firm ownership.

Fiduciaries:

Persons charged with the legal responsibility of administering pension assets, be they governing (trustees), managing or operating fiduciaries.

Fiduciary responsibility:

The legal obligation that fiduciaries administer pension assets with care, diligence, prudence and skill and in the sole interest of plan members.

Gatekeepers:

Professional advisor-agents operating in (American) private equity markets on behalf of pension fiduciaries.

Initial public offering:

The stage at which a small company may first become publicly-listed and traded on securities exchanges.

Institutional investor:

This term usually refers to such large financial entities as pension funds and insurance companies.

Investment financing:

Capital (debt or equity) that enables productive investment within an enterprise.

Investment infrastructure:

Very generally refers to the programs, support services and structures, etc., in place to expedite investment activity and/or add value to investment projects.

Joint trusteeship:

Arrangements whereby administrative powers are equally shared between employer and employee representatives. These are often found in co-contributory, multi- employer and public sector plans.

Limited partnership:

A pooling vehicle often used in private equity markets to syndicate the assets of investors (general partners) under specialty management (limited partners).

Lending institution:

A generic term for a bank, caisse populaire or credit union, etc.

Matchmaking:

Very generally, the process of linking business demand with appropriate sources of financing. More specifically, this term is used to describe formal efforts to strategically link entrepreneurs with suppliers of private debt and equity capital.

Merchant banking:

Also known as investment banking, this refers to privately-placed debt and equity activity in the middle market.

Mezzanine financing:

Also known as subordinated debt, this is debt-like financing that possesses equity features for the purpose of assuming more flexibility and higher risk in a transaction.