New Dawn Enterprises of Sydney had a long history in business and social development before it branched out into investment funds a decade ago. But over the past 10 years, New Dawn’s capital pool has become one of Nova Scotia’s longest running, largest and most successful community economic development investment funds.
The Sydney organization started out in the province’s CEDIF program in 2004-05, raising a modest amount to fund its own operations.
Ten years later, New Dawn has tripled the size of its annual raise. And the organization is now focused on investing in high-tech Cape Breton companies to help them grow.
Rankin MacSween, president of New Dawn Enterprises, said he couldn’t have predicted the steady growth that the investment vehicle has seen over the past 10 years.
“The community has really supported this,” he said in a recent interview.
“And we’ve been able to find ways of putting this money to good use and supporting local entrepreneurs.”
Over the past decade, New Dawn’s funds have attracted $8.2 million in investment. The group has also paid almost $788,000 in dividends to fund shareholders.
The Sydney group initially got involved in the program via its New Dawn Holdings arm as a means of funding some of its own operations and reducing bank debt.
Founded in 1976, New Dawn Enterprises operates nursing homes, a college and rental properties, and also offers health-care programs and other community-based services.
New Dawn has sponsored three different investment funds over the years, each with a different focus. The initial CEDIF attracted a handful of investors that first year and raised $450,000.
Today, New Dawn fund has more than 600 shareholders, most of them in Cape Breton Regional Municipality.
Their investments qualify for provincial equity tax credits, in addition to potentially earning dividends.
The New Dawn investment vehicle started going in a new direction with the 2011-12 share offering. A new fund raised $1.47 million that year — New Dawn’s highest amount to date. The amount was invested in Sydney firm Protocase, which manufactures custom electronic enclosures.
While the change was partially due to Nova Scotia Securities Commission rule changes that ended not-for-profit investment, New Dawn officials also saw a need in the community to help export-oriented companies grow, MacSween said.
“There’s a small but quite vital sector, and many of these companies are at a particular stage of development that’s beyond startup.”
Two years ago, the latest version of the Sydney group’s capital pool, New Dawn Innovation Fund, was launched.
The fund raised $1.4 million last year, which was invested in three Sydney firms, Advanced Glazings, Marcato Digital Solutions and MediaSpark.
New Dawn makes loans to the companies, and uses the interest payments to issue dividends twice a year, MacSween said.
During its most recent campaign this winter, New Dawn raised another $1.2 million. That was the second-highest amount provincially after Wind4All Communities, sponsored by energy company Natural Forces of Halifax.
Provincially, $7.6 million was invested in CEDIFs in 2013-14.
New Dawn’s capital pool is again invested in Protocase, along with two other firms, Halifax Biomedical Ltd. of Mabou and NovaStream of Sydney.
The general manager of Advanced Glazings said New Dawn’s investment is a big boost for local companies.
Michelle Milburn said her firm, which manufactures translucent walls that bring in natural light, used last year’s injection to add staff, increase inventory and revamp product lines.
“There are a lot of things that we just definitely could have not done without it.” The company, founded in 1995, is now shipping its building product to various parts of Canada and the United States, as well as Norway.
MacSween said New Dawn officials plan to continue fund offerings, which could be for internal or external investment. Investing in earlier-stage companies may be one possibility as the capital pool continues to evolve, he said.
“In many ways, investing in these companies was not only practical but symbolic. It’s a symbolic way for the community to get behind them.” He called the CEDIF program, which has attracted attention nationally and internationally, “an incredible piece of innovation.”
The need to increase the level of private investment locally was highlighted by the Ivany report, he said.
New Dawn’s funds are among 60 CEDIFs set up across the province over the past 14 years, said Economic and Rural Development and Tourism Department figures. The investment funds have raised money annually for businesses and projects ranging from coffee co-ops and brew pubs to wind farms. And Nova Scotians have invested $61 million since the program’s inception.
JoAnn Alberstat | Chronicle Herald | June 26, 2014