Kevan Cowan, tapped to lead the TSX Venture Exchange after Linda Hohol steps down in April after five years at the helm, says he wants to build on her success by boosting the junior market’s profile both at home and abroad.

Cowan, a 45-year-old former corporate lawyer, is about to become president of the Calgary-based venture-capital exchange, a subsidiary of Toronto-based TSX Group Inc. , giving up his dual role as TSX Group vice president of business development and senior vice president at the junior exchange. He has worked closely with Hohol for the past several years in helping to build the TSXV nationally.

“The TSX Venture Exchange is a great part of the Canadian capital markets and easily one of the world’s most successful junior exchanges,” Cowan says. “The job now is to keep getting the message out.”

Under Hohol’s leadership, the junior bourse established itself as a solid and stable home for Canada’s venture issues, and a first step for start-up companies looking to graduate to the Toronto Stock Exchange. But the junior market is heavily weighted in the mining and energy sectors, and a majority of the TSXV’s listed firms are based in Western Canada.

Cowan wants to attract more non-resources juniors — especially in the industrial and technology sectors — and more listings from Central and Eastern Canada. “We’ve been making inroads on that for the past couple of years,” he says, “And there remains opportunity to continue.”

Under Hohol, the TSXV has been focused on wooing domestic companies and has taken a cautious approach to foreign issuers, particularly non-American companies. With a strong domestic base now built, Cowan plans to focus on attracting foreign interest.

In the past year, Cowan has visited China, Australia and Britain and has been to the U.S. many times to build awareness and attract listings. Twenty-one Chinese firms were listed on the TSXV as of October 2006.

In his role as head of business development for TSX Group, Cowan has spent the past 18 months combining the business-development divisions of both the main exchange and the TSXV, in order to be able to present both exchanges as an integrated solution. “When selling the market in the U.S. and overseas, there’s an opportunity to sell both platforms,” he says.

Cowan will be working closely with Richard Nadeau, the TSX’s senior vice president in charge of listings, to pursue “opportunities for our two-pronged approach.”

The TSXV is well placed to attract U.S. listings, Cowan says, because U.S. exchanges appear to be focused on larger-cap companies and overall strategic issues. As a result, many U.S.-based junior equity companies aren’t attracting the attention or capital they need. Cowan contends the onerous regulatory environment in the U.S. is exacerbating the problem.

One way in which he proposes to build the TSXV’s U.S. business is to extend the capital pool company program to the U.S. market. The program, which has been used in the Canadian junior market for years, involves a group of investors pooling their money to form a shell company listed on the exchange, but without an underlying business. The investors then wait for an appropriate business opportunity or venture that is looking for capital, then the shell takes over that venture.

“The CPC program is well suited for the financing gap in the U.S.,” Cowan says.

RESPECTFUL OF COMPETITION

In the past several years, however, the TSXV and its TSX Group parent have seen competition from the London Stock Exchange’s Alternative Investment Market, which is attracting listings from Canadian start-ups. Cowan says that although he is always respectful of competition, the threat from AIM has been overblown: “Virtually all the Canadian companies on AIM are interlisted here, and the majority of their market support is here.”

Cowan’s ascension to the TSXV’s top job comes after almost a decade of working in the Canadian capital markets, beginning with the Canadian Dealing Network, the now-defunct unlisted junior exchange subsidiary of the TSX. He started with the CDN in August 1997 as general counsel, working on a project to help write the rules for the unlisted market, and became a director in October 1999.

Prior to joining the CDN, Cowan was a partner at Toronto law firm Smith Lyons LLP. He had worked there since 1988, before thinking about a career move. When he saw an ad for the CDN job, he had a “eureka” moment and knew he had found what he wanted to do next.

@page_break@The appeal of working for a stock exchange is the chance to be at the centre of the action, he says: “I love the flow of real-time information. To me, in terms of real-time information, there are newsrooms and there are stock exchanges. The amount of information that flows in and out of those places just fascinates me.”

At the tiny CDN, Cowan was able to work in all areas of stock exchange business. “One minute, I’d be writing the rules for the unlisted market; the next, I’d be refereeing a dispute between two traders,” he says. “It was a great way to learn about stock markets.”

In 2000, Cowan became vice president of the Canadian Venture Exchange, the new junior listings market created by the merger of three Western Canada exchanges (Alberta, Vancouver and Winnipeg), the CDN and the junior issuers of the Montreal Exchange.

In 2002, things came full circle when the TSX Group acquired CDNX and renamed it the TSXV. Cowan has subsequently been serving in his dual role at the TSXV and TSX Group.

A Toronto native with a law degree from Osgoode Hall Law School at York University and a bachelor’s degree from the University of Toronto, Cowan acknowledges that he has taken a somewhat unusual route to landing a top job at a stock exchange. But, he says, he has found the right career. “I enjoyed practising law, but I enjoy this even more,” he says.

Asked whether it will be a challenge to run an exchange in the West, considering his Toronto background, Cowan notes his experience of working on the CDNX merger and says he is excited by any opportunity to build bridges between the markets of Eastern and Western Canada.

Later this year, Cowan will move to Calgary with his wife, Sue, who spent 18 years in the investment industry with Sun Life Financial Inc., Midland Walwyn Capital Inc. and BMO Nesbitt Burns, and who now takes care of their children, Cole, 12, and Courtney, 10.

Cowan inherits a strong exchange that has prospered during several years of a commodities boom. He is not concerned about steering the exchange through any possible correction.

“It’s true that when the market cycle changes, venture capital gets hit the hardest. But I have a long-term view of the Canadian capital markets,” he says. “Our focus is on long-term sustainability.” IE