A new study of the capital markets in New Brunswick cites a need for more venture capital investment.

The New Brunswick Securities Commission released Wednesday what it calls “the first comprehensive study” of the province’s capital markets, conducted by Barrington Consulting Group Inc. of Fredericton.

The study, which focuses on the markets for small and medium enterprises, finds that there has been a reduction in the number and value of investments being made in SMEs in the province due to current market conditions; and that more needs to be done to attract venture capital firms from outside the province.

It notes that the reasons for a lack of VC investment include transportation difficulties and the lack of demonstrable ‘exit’ successes.

“Further effort needs to be dedicated to making New Brunswick a more open and inviting environment for foreign venture capital firms. These barriers have been discussed in the past and should be further addressed in order to attract more of this type of investment,” the study says.

The study also recommends: improving the commercialization of research within the province’s universities; give priority to applied research with the specific goal of commercializing new technologies; and implementing new data capture processes should to enable a better understanding of the capital markets.

“Healthy capital markets contribute to the overall economic well-being of the province; they can provide a wide range of options for raising capital suitable for growing businesses at different stages of their development,” says Rick Hancox, executive director of the NBSC.

“To understand whether progress is being made in developing the capital markets, we need a common ground from which to start measuring.”

The NBSC says it is releasing the study to solicit additional consultation and to act as a means to refine and improve the overall understanding of New Brunswick’s capital markets.

IE