Toronto, February 2, 2005 - VenGrowth Capital Partners ("VenGrowth"), a leading private equity firm with over $1 billion in assets under management, today announced the first closing of a new $40 million institutional fund. The VG Mezzanine I Limited Partnership will invest in mezzanine financing opportunities in traditional Canadian business sectors such as manufacturing and services on behalf of leading institutions. Investors include The Business Development Bank of Canada ("BDC"), BMO Nesbitt Burns Equity Partners and The Canadian Medical Protective Association. The diversified VenGrowth II Investment Fund also invested in the new institutional offering.
Mezzanine financing - a form of private equity structured on a company's balance sheet between senior bank debt and equity - is an increasingly important option for Canadian companies looking to fund growth or facilitate ownership succession such as a management buyout. The institutional capital pool further strengthens VenGrowth's position in this Canadian mid-market. The Fund will co-invest alongside the retail labour sponsored investment funds ("LSIFs") VenGrowth Traditional Industries Fund and VenGrowth III Investment Fund.
"The support gained from leading financial institutions represents further opportunities for VenGrowth's mezzanine finance group, following ongoing fundraising success for VenGrowth's LSIFs," said Graham McBride, VenGrowth Managing General Partner. "VenGrowth continues to be the only LSIF firm to consistently attract significant institutional as well as retail capital."
The VG Mezzanine I Limited Partnership represents the fourth institutional fund closed by VenGrowth. The VenGrowth Funds, collectively managing over $1 billion in assets, count leading pension funds, insurance companies and now all of Canada's top-five banks as institutional investors. These institutions have selected VenGrowth and the private equity asset class on their own merits, as institutions are not eligible for the tax incentives received by retail LSIF investors.
"We recognize that there are significant mezzanine financing opportunities in the Canadian mid-market," said Brian Elder, Vice President, BDC Venture Group. "A track record of success, a wide strategic network and an experienced mezzanine team made VenGrowth a natural choice as a partner for BDC in this area."
VenGrowth's Mezzanine Finance Group invests in mature, established Canadian companies with demonstrated cash flows, proven management teams and well-defined growth strategies. Investments are primarily structured as subordinated debt to generate interest income to the Funds. In addition, the Funds will typically hold equity interests alongside the loans with the intention of generating additional return potential.
Since December 2003 VenGrowth has invested $53.3 million in mezzanine financing deals with eight companies. Most recently, VenGrowth participated in the financing of value beer leader Lakeport Brewing Corporation, helping celebrated entrepreneur Teresa Cascioli become majority shareholder of the Hamilton-based brewery in January 2005.
About VenGrowth
With over $1 billion in assets under management, VenGrowth is Canada's largest private equity and venture capital firm managing both retail and institutional assets. Since 1982, VenGrowth's accomplished private equity managers have invested over $1.1 billion in 180 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. Portfolio companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit www.vengrowth.com.
For further information:
Angus Fisher
VenGrowth Capital Partners Inc.
(416) 628 9255
afisher@vengrowth.com
