Hello and welcome back to the Institutional Beat Podcast, where we cover interesting and relevant topics for institutional investors. I'm your host, Slava Sherbatov, and today we're going to dive into the important and fast-growing area of Indigenous investments. We have two perfect guests to do this with, members of our Indigenous Investment Services team, Gord Keesic and Kai Lee.

Guys, welcome to the podcast.

Thanks for having us.

Yeah. Thank you.

Yeah. So, we are recording this episode close to the National Day for Truth and Reconciliation. And so it's especially timely to have you join – not only as investment professionals focused on serving First Nations and Indigenous communities, really all across the country, Gord, you’re based in Thunder Bay and Kai, you're in Winnipeg – but also as members of First Nations yourselves.

And normally I would do a bit of an introduction, but both of you have interesting stories to share, and so I'm going to ask you to do my job for me, and just take a couple of minutes and share your personal stories. Gord, perhaps we'll start with you.

Sure. Now, normally, I'm not happy to do somebody else's job, but in this case, I'd be pleased to. So my name is Gordon Keesic. I'm an institutional portfolio manager with RBC Global Asset Management, with PH&N, and I work out of Thunder Bay, Ontario. And just like Slava said, I am from Lac Seul First Nation, so I'm an Ojibwe from northwestern Ontario.

For those of you who don't know where Lac Seul  is, it's located close to Sioux Lookout. For those who need a reference point, it's about five-hour drive northwest from Thunder Bay. And so I've been with PH&N, or Global Asset Management, for just about 20 years. I've greatly enjoyed my time here, and my job is to work with Indigenous communities to manage their long-term investments.

And just a little bit of background; this whole topic of reconciliation is actually very important for me and my family. See, I was born in Red Lake, Ontario, and the reason why I was born there is because my grandparents used to live in Lac Seul First Nation, but the various levels of government, they decided that they were going to open a hydroelectric dam in Ear Falls, which flooded our First Nation, and many people moved off the reserve into neighbouring communities where the water levels were more stable.

And so they took all their kids and they moved to Red Lake, Ontario, and as a result of that, my dad was born there and I was born there. So perhaps you can have a little bit of understanding in terms of why this idea of reconciliation is so important for me, just given my family history as well.

So Slava, that's a bit about me and my background.

Thanks, Gord. Kai, over to you.

All right, thank you, Slava. So my name is Kai Lee, and I'm an institutional associate on the Indigenous Investment Services team within PH&N Institutional and RBC Global Asset Management. I'm a member of Peguis First Nation, so that's just north of Winnipeg, Manitoba. And I work out of our Winnipeg office as Slava mentioned, which is located on Swan Lake First Nation 8a, just west of Winnipeg.

I've been working in the investment industry for over ten years. Prior to this, I spent a brief period of time in the banking world where I quickly learned that lending – or more specifically, declining loan applications – was not my passion. This led me down the path of helping clients with investments, and I've never turned back since.

Well, thank you, Gordon, Kai, for sharing your stories. And you touched on how long you've been doing this, and working with Indigenous communities, and maybe just to help our listeners understand – what makes working with Indigenous investors different compared to traditional institutional investors like pensions and endowments?

This is the key question which has enabled us to do quite well in this market for the last number of years. And so our understanding basically comes from a lot of discussions that we've had with different Indigenous groups across Canada. And so a couple of things have really stood out to us – first of all, we'll talk maybe just a little bit about the language differences.

So, for some of the communities we go to, for example, we have to report to the community members on how the community's investments did in the previous year. Now, at some of those meetings, the presentations we do, they're translated. And this can prove to be difficult for some of these translators because, for example, we would think that the idea of compound interest is a fairly common idea.

However, in Indigenous languages in Canada, there's no real equivalent for this idea. So what we have to do is we have to try to convey this idea in a way that's easily translatable. And so in these presentations, we try to use a lot of visuals, diagrams, etc. to get across these ideas so that everybody can understand. So that would kind of be one difference -- is the language, the language barriers per se, or the opportunity, depending on your perspective.

The other thing, kind of a related topic to that, is often times the individuals who are part of the community themselves, they want us to come and talk to them. So we actually present to the beneficiaries of the monies. Now this is different from your sort of, typical institutional investor, where as investment professionals, we report let's say, to an investment committee, and not perhaps to the pensioners directly themselves.

So these would be two differences between Indigenous investors and sort of your typical, if that's the right word to use, institutional investor. One would be language differences, second would be the engagement with the beneficiaries of the funds. The other thing I would add, is that typically a lot of our institutional investors, they're located in big cities, you know, maybe where their headquarters are.

But for us, we often have to travel to very remote locations in order to have a good relationship and maintain good contact with our investors. So those would be sort of the three ideas that I would highlight, Slava, in terms of differences.

Maybe I'll just add a jump in here right after that, thanks, Gord. So Slava, when you mentioned “traditional” institutional investors, when I hear that, it almost sounds as if these types of investors, like pension plans and university endowments and foundations, they've had money for a long time. This is something perhaps that is different for our Indigenous investors, who have not always had long-term investments.

We've seen this in the growth of our business. Even if you look back 10 years ago, we had 20 Indigenous clients across Canada managing $500-600 million of long-term monies. Fast forward to now, and we're helping over 50 Indigenous clients across Canada and managing over $10 billion. You know, this is not to brag, but it just it reflects the trust that nations have with us, and I also think it reflects, you know, this important time in history as Indigenous investors that I'm very honored and privileged to be a part of and helping across Canada.

Thanks, Kai, that's a good observation – I think the numbers you just mentioned obviously speak to the growth that we've seen, but really the broader growth of Indigenous people as investors in Canada. Now, you both talked about how long you've been in in this business, and Gord, you've been leading our Indigenous practice for more than a decade.

Can you talk a little bit about some of the shifts or changes or themes that you may have observed over that period of time? It feels like something has changed, in the last 5 to 10 years. I'm curious if you can speak to that. Gord, why don’t we start with you?

Sure. So, one of the things that I've really noticed, and perhaps Kai will talk about a few other things, but I just wanted to talk about this idea – which is a bit more abstract, but I believe I've sensed it in different Indigenous investors and people across Canada – and that's the idea of an Indigenous investment consciousness.

Now, I don't know how to how else to describe it, and I've been trying to describe it with different word choices for the last couple of years, but I think this is the right way to think about this, and to try to identify it.

And so how I would describe this is, as Indigenous peoples have become wealthier and as they've been able to generate monies – through business, or through a variety of different methods to become wealthier, to become more self-sufficient, to exercise power over their own financial futures – there's this sense that as a people, we are now in charge, or we have more and more wealth.

And so there's this idea of, what are we going to do with this wealth to help benefit us more directly? And also, as part of that, is different ideas about how should we manage this wealth in terms of certain principles? So I just wanted to share one of the elements of this consciousness. And I've heard this from a lot of different Indigenous investors across Canada, is the idea that we don't want our investments or our monies to be negatively impacting another group somewhere else.

And so this is one of the things that I've seen constant across all of these conversations that I've had about Indigenous wealth, about things they want or don't want to do with their monies. And so I think as this consciousness develops over time, I believe these ideas about principles in terms of Indigenous investment, I believe they're going to be more fleshed out, so to speak.

But for now, that's one of the things I wanted to highlight, is just this idea of a sort of a collective power with regards to increasing levels of wealth.

Thanks, Gord, I share the same the same sentiment, and you've done a great job of explaining everything that we've seen, and so thanks for that. And maybe on just a more of a technical level, just to inform some of our listeners, over the last number of years we've seen – number one, we typically manage long-term monies, and these monies are a result of wrongs to Indigenous peoples.

Typically these are settlement claims. We've seen more claims, larger claims. We've seen in the past a First Nation would file a claim, perhaps for a treaty land entitlement or a surrender land claim trust, and now there's different, I guess, compensation or reasons for compensation.

And that would be like typically agricultural benefits; we've seen instead of just each individual nation receiving monies, we've seen treaty-level settlements as well as regional and national settlements. What's interesting as well is, there's also been perhaps a common goal of economic participation with First Nations in Canada. So this has led to partnerships which will create nation-source revenue – think about mining, forestry, oil and gas, Nations partnering with large corporations in Canada.

And so this has been a common theme, which did not exist 10, 20 years ago, at least to not this level. And I think this has led to an increased demand for more sophisticated services and more institutional asset managers or investment managers, working in this space today than perhaps a handful of years ago.

And Kai, and I think this also highlights perhaps, the fact that for many First Nations, this is the first access to significant capital, and the importance of advice and guidance. But this also probably brings its own set of challenges, just wondering if you can talk a little bit about what you're seeing, where the First Nations need the most support, and where perhaps you and Gord are spending your time.

Sure. It starts, I think, at the very ground level, so to speak. And the first step is to get some of the basics right. And so the nation will often have goals and objectives for these monies. They've waited a long time and so there's lots of great ideas they may have, but we help with the collaboration of those ideas and putting them all together at the onset.

This is very important to match the goals and objectives of the monies with the risk tolerance of the investor. And that helps with policy development in terms of long-term investments, as well as perhaps annual spending that these investments may generate for the nation. So, education on governance, how to have proper balance between satisfying the needs of the current generations, or spending some money, versus saving the money, for future generations.

So these are some of the things that we can help kind of put into a reality, and help the Nation make decisions with, like you said, sometimes the first time having access to a material amount of money.

Yeah – Gord, anything you'd add from your perspective?

Yeah, I believe that's one of the key ideas that Kai had just mentioned is the idea of shifting the mindset of the leadership from managing poverty to wealth. And this is a challenge, so to speak, but it's also a wonderful opportunity – often those things go hand in hand in hand.

And this is what a number of chiefs have told me: you know, we've gone from managing poverty for so long, and now we have maybe this significant pool of money, or we have very successful business ventures, you know, how do we shift our mindset from sort of managing poverty to wealth? And so that's one of the biggest challenges, but also opportunities. It's a great time.

And so from our perspective then, the other challenge or opportunity with regards to this is sort of helping them or working with them as they're taking the community through this process, through this mindset change of – not just the leadership, but obviously the leadership needs the support of the community as well. So, talking about these ideas with community members during this process, this shift in mindset so to speak, that would be probably one of the challenges and opportunities, that we see.

Yeah, and maybe just to follow up on this, Gord, as I mentioned at the outset, we are recording this close to the National Day for Truth and Reconciliation. And so as an institutional investment manager working with Indigenous communities all across Canada, in your opinion, what role can we – and perhaps you can even answer from a broader industry perspective – what role can we play on the pathway, and to support reconciliation and to support the long-term economic well-being of the communities that that we serve?

And you've touched on some of these elements already, but I wonder if there is more you can add here?

Sure, so where I like to start in thinking about this idea of reconciliation, is just what does that word mean? So the word “reconcile” basically means to make something right. So when we talk about this term, reconciliation, there's just a general acknowledgment that things historically have not gone the way that they perhaps, could have. And this is not to blame anybody or point fingers, that's not why I'm saying this.

And so, the recognition that there are things that need to be rectified, or that need to be changed, this is basically the time in Canadian history that we are living through – where there's widespread general acknowledgment that certain things we need to try to correct, or to right these historical wrongs.

And so for us here, we're actually directly involved in this process of reconciliation. And I'll just give one example before turning it over to Kai. So, if you can think about a historical wrong, like for example, my community – I talked earlier in my remarks about how our community was flooded without our knowledge or consent, and how this greatly impacted the lives of different people, including my grandparents.

So the federal government, we pursued a claim against the government, asking them to reconcile what had happened. And so the government, in addition to a number of other things, they also offered financial compensation to our community. And so during, during the processes of these claims or the settling of these historical claims, we often will participate in the settlement agreement itself, by offering financial advice and expertise that the government requires before they will transfer the funds for the historical matter over to the First Nation.

So we are actually directly involved in this idea of reconciliation. And so kind of along with that, part of our role, if you can think about the reason why these historical wrongs happened, is because the Indigenous people did not have the power, they did not have what we call agency – the power to effect or to directly impact their own environment.

There's a whole bunch of reasons for that. I don't want to go into all that now. So one of the things that we also do, in addition to the direct activity I mentioned, is we try to promote an environment whereby we will give information to the Indigenous community decision-makers so that they can make informed decisions about their own financial futures.

For example, you know, how are they going to invest these monies? So our job is not to go in there and tell them what to do. Our job is to provide relevant information so that they can make an informed decision, so that they can exercise this agency, which is what we call it. And that's the second way that we contribute to this idea of reconciliation here in Canada.

Great, Gord. Thank you. That's very powerful, and we appreciate you sharing some experiences that your Nation and community has gone through and your family as well. So, at the end of the day, I mean, we are finance professionals, investment professionals, and our titles are investment managers. But for me, it goes beyond managing monies.

We need to be educators, not just to leadership or governance, but also to membership. Gord, you mentioned earlier, what's unique about this line of work is we interact with the community members. We speak to children, minors, we speak to elders. We need to, not just try and earn the most return all of the time. It needs to be a partnership where we can deliver education and empower the future generations to be able to make an impact on their nation and be good stewards of these long-term monies.

And so what I like about this line of work is, you know, we always have to balance the very sophisticated topics that that we find very natural being in finance, and we have to distill it in a way that everyone can understand. Because, you know, stocks and bonds and all of these things that we know, some people are not experts in. So we have to do a very good job of being teachers and educators, as well as investment managers.

Well, thank you both, for sharing that. And I think, again, one of the things that that stands out in having been on the road with you and attended these meetings, it's clear that, of course, delivering high-quality investment advice and delivering strong investment results is critically important, but again, the work goes way beyond that. And understanding cultural considerations and community needs and building long-term partnership and really trust is just as, if not even more important.

And I think again, both of you made that point. Maybe one final question I'll ask you, and hopefully it's an easy one: If you could choose one thing you'd like to see in the space of Indigenous investing in Canada, what would it be?

Kai, maybe we'll get you to answer that first.

Yeah, sure thing. So for me, you're right, this is this is an easy one. So I would love to see more Indigenous representation in our world of finance and investment management. We see that more and more Indigenous people are working perhaps in the personal banking and commercial banking side of finance, but very rarely do we come across other First Nations professionals that are in the investment management industry, let alone this more unique space of institutional investment management. So that's something, if I had one wish, Slava, would be to see more representation of Indigenous peoples in Canada working in the investment industry.

And as we've talked about, this is a very interesting time to be in this space. So hopefully for all those listeners, this could be some encouragement to, to get into the area of finance and investing.

Great, Kai, and completely agree, we certainly have lots of work to do there. Gord, what about you?

So, you know, we've talked about some pretty serious issues so far. Thinking about the idea of reconciliation and all that, so I'll probably end with a bit of a lighter note here. So, I talked about how I need to travel to all of these different places? I actually need my own airplane. That's what I need. So, if RBC could give me my own Dreamliner, I think I'd be in pretty good shape.

But, no, more seriously, it would be great to see investment funds and solutions which are like directly impacting communities in a positive way. And that's something that, again, we as an industry can all work towards. So, Slava, that would be sort of my two things to answer your one thing question.

No, listen, I do think the plane comment is quite serious, because you do travel quite a bit! And for listeners you can probably hear the audio is not great, and there are phones going off in the background – that is kind of, a day in the life of Gord Keesic as he travels across the country.

Well, perhaps this is a good place to wrap things up. And, again, thank you both for your time and sharing your perspectives. And thank you very much for the important work that you do with our clients and Indigenous communities all across the country. I also want to thank our listeners – I hope you enjoyed this podcast and will join us next time. Thank you.

Thanks, everyone.

Thank you.

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