Eight Capital Closes Its Doors as Top Executives Transition to Stifel Canada
Investment dealer Eight Capital has announced plans to wind down its operations, marking a significant shift in Canada’s investment banking landscape. The decision, made by Eight Capital’s partnership committee, was confirmed yesterday and comes amid ongoing challenges in the speculative industries the firm has long served.
Eight Capital, formerly known as Dundee Capital Markets, has been a player in sectors such as cannabis and junior resources since its establishment in 2016. According to a memo obtained by The Globe and Mail, the partnership committee voted to initiate an orderly wind-down of the firm late Tuesday.
Following this decision, Eight Capital has ceased executing trade orders, signaling the end of its active trading operations.
In the wake of Eight Capital’s closure, approximately a dozen employees from the firm’s sales and trading division, as well as its mining advisory practice, are expected to transition to Stifel Canada. Among those relocating are top producers Winston Miles, Kevin Costa, and David Morrison, sources familiar with the matter revealed. Eight Capital currently employs around 60 individuals, making this transition a notable event within the industry.
The parent firm Stifel Financial has also navigated these turbulent market conditions. In 2019, Stifel expanded its Canadian operations by acquiring GMP Capital’s capital markets division, bolstering its advisory capabilities. However, the firm faced its own challenges in 2024, when it closed its Calgary office, resulting in the loss of approximately 35 employees. Stifel attributed the closure to “current market conditions and operations costs,” highlighting the pervasive difficulties within the sector.
Eight Capital’s roots trace back to Dundee Capital Markets, a firm that rebranded after senior employees acquired its assets from Dundee Corp., establishing Eight as an independent entity. The timing of its inception coincided with Canada’s burgeoning cannabis industry, allowing Eight Capital to become a leading underwriter and trader for Canadian marijuana producers. This strategic positioning enabled the firm to build a robust client base during the cannabis boom.
However, the investment landscape began to shift in 2018 when the cannabis market cooled significantly. Many cannabis companies supported by Eight Capital experienced dramatic declines in share prices, some plummeting by over 90% from their peaks. This downturn severely impacted Eight Capital’s revenue streams, forcing the firm to diversify its focus.
In recent years, Eight Capital increased its emphasis on junior mining and technology sectors, securing notable mandates such as serving as a joint bookrunner for Foran Mining Corp.’s $260-million share offering in 2024. Despite these efforts, the firm has struggled to maintain sufficient deal flow, a challenge that has affected independent investment dealers broadly.
The decline in deal flow across speculative sectors has created a challenging environment for independent investment dealers like Eight Capital. Reduced fee income from struggling junior producers has led to decreased profitability, prompting many firms to consider mergers or closures.
Information for this briefing was found via The Globe And Mail and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.