November 11, 2010 17:11 ET

GrowthWorks Seeks to Improve Situation for VenGrowth Fund Shareholders

TORONTO, ONTARIO--(Marketwire - Nov. 11, 2010) - GrowthWorks Ltd. ("GrowthWorks") is seeking to bring forward a significantly better proposal for shareholders of the following VenGrowth Funds:

The VenGrowth Investment Fund Inc.

The VenGrowth II Investment Fund Inc.

The VenGrowth III Investment Fund Inc.

The VenGrowth Advanced Life Sciences Fund Inc.

The VenGrowth Traditional Industries Fund Inc.

than the proposed sale of assets of the above funds to Covington Fund II Inc. (the "Covington Proposal") to be voted on at the meeting of shareholders of the VenGrowth Funds to be held November 25, 2010.

To allow time for a GrowthWorks proposal to be formulated and presented to VenGrowth Fund shareholders, GrowthWorks is taking steps to formally solicit VOTES AGAINST the Covington Proposal. It is also seeking to requisition a VenGrowth Funds shareholder meeting to consider and vote on a GrowthWorks proposal as soon as practicable.

David Levi, President of GrowthWorks, said, "We think VenGrowth shareholders should have the opportunity to receive a better offer. We were contacted by investment advisors who were concerned about the Covington Proposal. We then looked into it more. Based on our experience with these kinds of transactions, we believe a transaction with one or more GrowthWorks managed funds can be put together that is significantly better for VenGrowth shareholders than the Covington proposal. We're asking VenGrowth shareholders to vote against the Covington proposal to allow us to do that."

Mr. Levi also confirmed, "GrowthWorks was not invited to participate in the review process that led to the VenGrowth Funds' boards recommending the Covington Proposal." GrowthWorks is the largest independent retail venture capital fund manager in Canada outside of Quebec, with seven offices across the country. GrowthWorks managed funds have completed nine mergers with other retail venture capital funds in the past five years. The GrowthWorks group is a leader in these kinds of transactions.

GrowthWorks has filed a dissident proxy circular (the "GrowthWorks Circular") and will formally solicit VOTES AGAINST approval of the Covington Proposal at the November 25, 2010 meeting of shareholders of the VenGrowth Funds. The GrowthWorks Circular is posted on the SEDAR website ( under the profile of each VenGrowth Fund and on the GrowthWorks website at VenGrowth shareholders are encouraged to contact their brokers/investment advisors if they have questions about how to vote with respect to the Covington Proposal. Shareholders and investment advisors may also contact GrowthWorks at 1-800-268-8244 if they would like to receive copies of the GrowthWorks Circular, which contains instructions for VOTING AGAINST the Covington Proposal.

Any VenGrowth Fund shareholder who wishes to VOTE AGAINST the Covington Proposal may do so by following the proxy voting instructions in the VenGrowth Funds' information circular and ticking the VOTE AGAINST box beside each applicable resolution #5 in the VenGrowth Funds' proxy form.

GrowthWorks encourages all VenGrowth Fund shareholders to read the GrowthWorks Circular before casting their votes with respect to the Covington Proposal. The terms of a GrowthWorks proposal have not been finalized. As is typical for transactions of this kind, it is expected that a GrowthWorks proposal would be subject to a number of conditions. There can be no assurance that the conditions to a GrowthWorks proposal will be satisfied, nor can there be any assurance that the conditions to the Covington Proposal will be satisfied.

About GrowthWorks ( GrowthWorks™ managed funds provide investment capital for Canadian companies and tax-advantaged investment opportunities for Canadian investors. GrowthWorks manages approximately $560 million in assets through the GrowthWorks Canadian Fund Ltd., GrowthWorks Commercialization Fund Ltd., GrowthWorks Atlantic Venture Fund Ltd., and Working Opportunity Fund (EVCC) Ltd. GrowthWorks identifies, analyzes and structures investments in companies with high growth potential. Building on more than 18 years of investment expertise, GrowthWorks is a leader in Canadian venture capital management.

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