Carney’s Israeli-Born Pick To Head New Sovereign Wealth Fund Has Few Ties to Canada, Raising Eyebrows

TORONTO — Commentators are asking why Prime Minister Mark Carney has chosen an Israeli-born hedge fund manager with no record of having lived in Canada to head up his new sovereign wealth fund, which will kick off next year with $25 billion in seed money from the federal government.A government statement says all Canadians will be able to buy into the fund which, in a move akin to the Trump administration’s investments in dozens of companies, is designed to “pursue co-investment opportunities in projects and companies receiving federal support, as well as selective strategic investments in high-potential Canadian projects and companies.”Karen Karniol-Tambour, who was named this week to be CEO of what will be known as the “Canada Strong Fund,” appears to have the right financial credentials for the job. During more than 20 years working at Bridgewater Associates, one of Wall Street’s biggest hedge funds, she rose to become the co-chief investment officer in 2023 and for seven years has been listed by Barron’s among the 100 most influential women in American finance.In a post on her Linked-In account, Ms. Karniol-Tambour thanked Mr. Carney — himself a veteran of the Wall Street giant Goldman Sachs — and said, “I look forward to building something that will strengthen Canada and Canadians for generations to come.”But some critics are questioning the depth of Ms. Karniol-Tambour’s commitment to Canada. While she holds Canadian citizenship through her mother, a flattering 2018 profile in Forbes says she was born in Israel and raised at Netanya, about 19 miles north of Tel Aviv, before entering Princeton University to study international and public affairs. Upon graduation in 2006, she joined Connecticut-based Bridgewater where she has worked ever since.“What of the optics of bringing in an American transplant to run a sovereign wealth fund?” asks columnist Brian Lilley in the Toronto Sun. “Ms. Karniol-Tambour is described in the news release issued by Carney’s office as a Canadian citizen, and they describe her as returning to Canada. The trouble is, there is no public information that she ever lived in Canada, was educated in Canada, or worked here.”What has not emerged is any public criticism from Canada’s major Muslim organizations, which speak for almost 5 percent of the population. That may be explained in part by her role on the board of Seeds for Peace, an NGO that brings young people of different nationalities together at a summer camp in Maine each year. According to the Forbes profile, the teen-aged Ms. Karniol-Tambour was inspired to study international affairs after meeting Palestinian youths at the camp.Beyond Mr. Carney’s choice of a CEO, some critics are questioning the rationale behind the fund itself. While most countries’ sovereign wealth funds are financed with surplus revenue generated through oil sales or trade, the $25 billion intended to kick-start the Canada Strong Fund will come from a central treasury account that is already in the red.“Not exactly a sovereign wealth fund when you need to borrow every penny,” writes Mr. Lilley in the Toronto Sun, while the leader of the opposition Conservative Party, Pierre Poilievre, has described it on Facebook as a “sovereign debt fund” financed on the “national credit card.”Free market advocates, meanwhile, argue that the government should not be “picking winners and losers” by investing in some companies at the expense of others.“When the government enters a capital market with a $25 billion fund backed by taxpayers, it does not simply add capital to the system, it can distort the market,” says an analysis published Thursday by the Macdonald Laurier Institute, an Ottawa-based think tank.” The result may not be more investment in total, but a displacement of private capital by public capital in projects that could have proceeded without government involvement.”Mr. Carney has defended the fund as an essential element of his drive to make Canada more self-sufficient in the face of American trade restrictions by providing capital to speed up the construction of new trade corridors, ports, energy grids, and critical mineral projects. He also argues that, with one of the lowest debt-to-GDP ratios amongst major economies, Canada can well afford to make the investment.Regardless of the ultimate impact on the economy, the fund looks like it will be a good bet for ordinary investors. Any citizen or permanent resident will be able to purchase “notes” in the fund, similar to certificates of deposit, at retail banks and financial institutions with a guarantee that their eventual returns cannot dip below their initial investments.

Carney’s Israeli-Born Pick To Head New Sovereign Wealth Fund Has Few Ties to Canada, Raising Eyebrows

Carney’s Israeli-Born Pick To Head New Sovereign Wealth Fund Has Few Ties to Canada, Raising Eyebrows

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