Royal Bank of Canada is launching a growth fund that will invest up to US$725 million in Canadian companies, marking a major bet on the country's economic diversification. The country's largest bank by market value will form and invest in the fund, making direct equity investments in Canadian businesses.

President and CEO Dave McKay announced the initiative Thursday, positioning it as a strategic move to capitalize on Canada's efforts to develop defense, energy and other key sectors. The fund represents a pivot away from dependence on the massive U.S. market, as Canada seeks to strengthen domestic industries and reduce economic vulnerabilities.

The launch underscores RBC's commitment to Canadian business growth at a pivotal moment for the country's economic strategy. By deploying nearly three-quarters of a billion dollars in growth capital, the bank aims to support companies across critical sectors while potentially generating substantial returns for investors.