Toronto, November 15, 2004 - VenGrowth Capital Partners ("VenGrowth"), a leading private equity firm with over $1 billion in assets under management, today announced that Friday November 19, 2004, will be the final day for new investors in the industry-leading VenGrowth II Investment Fund Inc. ("VenGrowth II").
Launched in January 2000, VenGrowth II is the most well-capitalized national Canadian labour sponsored investment fund ("LSIF") with $477.8 million in total net assets and over 100,000 existing investors as of November 5, 2004. The second in VenGrowth's flagship LSIF series, the Fund is invested in a diversified portfolio of 64 companies - predominantly later-stage venture capital opportunities with excellent growth prospects.
Running a series of finite, well-capitalized venture capital pools is consistent with best management practices in the venture capital industry. An established strategy in the institutional market, VenGrowth introduced the practice of capping venture capital funds to the Canadian retail market when it closed its original LSIF offering - The VenGrowth Investment Fund Inc. - to new investors in 1999. Capping maximizes long-term return potential for shareholders of VenGrowth II in two ways: it will allow the portfolio to reach a fully-invested position, and enable the Fund's investment managers to reduce the number of new investments in younger companies that will still take years to mature.
"VenGrowth II has been one of the most active Canadian venture funds during the best buying opportunity we've seen in over a decade, investing over $411 million in Canada's leading small and medium-sized businesses since 2001," said David Ferguson, Managing General Partner of VenGrowth. "The downturn in public stock markets pushed private company valuations down significantly during that period, creating an excellent opportunity for well-capitalized venture capitalists. VenGrowth II's portfolio of existing companies will now mature towards liquidity events in unison."
In venture capital investing, returns are principally generated when a portfolio company is "exited", either by way of taking it public on a stock exchange or by selling the company to a large strategic buyer. It often takes between four to eight years for a venture-backed company to reach the stage that it is ready for an exit event, depending in part on external market conditions.
The exit market for Canadian venture-backed companies has shown signs of moving into a more positive phase following over three years of relative inactivity. VenGrowth II took advantage of the improved exit conditions in 2004, successfully exiting its investments in portfolio companies Changepoint Corporation and Innova Lifesciences Corporation. The companies were purchased by strategic acquirors in April and October, respectively. Existing VenGrowth II portfolio company Q9 Networks Inc. was listed on the Toronto Stock Exchange in April 2004.
The VenGrowth III Investment Fund, VenGrowth II's successor and the third in VenGrowth's diversified flagship fund series, was launched in October 2004.
About VenGrowth II
The VenGrowth II Investment Fund Inc. ("VenGrowth II"), is a broadly diversified, core venture capital fund focused on innovative growth industries for above average long-term return potential. The Fund's portfolio is diversified across a broad range of predominantly later-stage companies and industry sectors spanning enterprise computing, application software, communications, semiconductors, life sciences, traditional industries and special growth opportunities. This diversified approach is designed to offer investors the combined benefits of high return potential and lower risk. The Fund is managed by a team of specialized VenGrowth professionals with extensive operational and industry experience. The Fund also leverages the expertise of an external advisory board including high profile members of US and Canadian business communities. In addition, the professionally managed Fund offers investors long-term performance potential, 100% RRSP-eligibility and, through its LSIF structure, eligibility for substantial tax credits. The Fund had net assets of $477.8 million as of November 5, 2004.
About VenGrowth Funds
The VenGrowth Funds are premier private equity funds of VenGrowth Capital Partners ("VenGrowth"), a leader in the Canadian alternative investment market. Since 1982, VenGrowth's accomplished team of seasoned venture capital and private equity investment managers has invested over $1 billion in 177 companies, building a strong track record of successful portfolio transactions. The diversified VenGrowth Fund family targets predominantly later-stage, high quality private companies in key Canadian business sectors including technology, life sciences and traditional industries. Today, the VenGrowth Funds manage over $1 billion in assets on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. For more information, please visit www.vengrowth.com. VenGrowth Capital Partners means VenGrowth Capital Partners Inc. and its affiliates.
For more information:
Angus Fisher
VenGrowth Capital Partners Inc.
(416) 628 9255
afisher@vengrowth.com
