GrowthWorks Canadian Fund Ltd.

GrowthWorks Canadian Fund Ltd.

August 16, 2011 05:35 ET

GrowthWorks Supplements Performance Data for VenGrowth Shareholders

TORONTO, ONTARIO--(Marketwire - Aug. 16, 2011) - On July 26, 2011, GrowthWorks Canadian Fund Ltd. ("GrowthWorks") announced an improved proposal for merging the five VenGrowth Funds into GrowthWorks (the "GrowthWorks Proposal"). The terms of the GrowthWorks Proposal are set out in detail in GrowthWorks' dissident proxy circular dated July 26, 2011 (the "GrowthWorks Circular"), as filed on the SEDAR (www.sedar.com) and GrowthWorks websites (www.growthworks.ca). At meetings scheduled for August 25, 2011, VenGrowth Fund shareholders will vote on a proposal (the "Second Covington Proposal") to merge the VenGrowth Funds into Covington Fund II Inc. ("Covington II"). GrowthWorks is soliciting proxies from Class A shareholders of the VenGrowth Funds voting against the Second Covington Proposal. If the Second Covington Proposal is voted down, GrowthWorks intends to take steps to requisition meetings of VenGrowth Fund shareholders to vote on the GrowthWorks Proposal.

GrowthWorks believes that the GrowthWorks Proposal offers a number of advantages for Class A shareholders of the VenGrowth Funds when compared to the Second Covington Proposal, including a manager with a strong track record and more experience managing life sciences investments (which represent about 40%, by value, of the VenGrowth Funds' combined venture investment portfolio). Under the GrowthWorks Proposal, two new series of GrowthWorks Class A shares (the "VG Merger Shares") would be distributed to Class A shareholders of the VenGrowth Funds. As newly created series with a specially tailored fee schedule, there is no historical performance data available for the VG Merger Shares. However, to assist Class A shareholders of the VenGrowth Funds in considering whether GrowthWorks' manager or Covington II's manager is a better choice to manage the assets of the VenGrowth Funds going forward, Appendix D to the GrowthWorks Circular includes charts that provide historical performance information for GrowthWorks, the VenGrowth Funds, Covington II and other funds managed by the manager of GrowthWorks and Covington Fund II.

The Ontario Securities Commission has requested that GrowthWorks provide supplementary standard performance data in respect of each of the funds for which a performance chart is provided in Appendix D to the GrowthWorks Circular. GrowthWorks is pleased to provide this additional performance data in a supplemented Appendix D to the GrowthWorks Circular, as attached. To comply with regulatory requirements for standard performance data, the supplementary performance data for GrowthWorks is divided into periods before and after material merger transactions completed by GrowthWorks.

A COPY OF THE GROWTHWORKS CIRCULAR HAS BEEN FILED AND IS AVAILABLE ON THE SEDAR WEBSITE AT www.sedar.com, TOGETHER WITH THE FORM OF PROXY BEING SOLICITED BY GROWTHWORKS. THE GROWTHWORKS CIRCULAR MAY ALSO BE ACCESSED AT www.growthworks.ca AND BY CALLING GROWTHWORKS AT 1-800-268-8244. VENGROWTH SHAREHOLDERS ARE ENCOURAGED TO READ THE GROWTHWORKS AND VENGROWTH CIRCULARS AND TO CONSULT WITH THEIR INVESTMENT ADVISORS ABOUT THE GROWTHWORKS AND COVINGTON MERGER PROPOSALS.

As disclosed in the GrowthWorks Circular, the GrowthWorks Proposal is subject to a number of conditions, including the Second Covington Proposal being voted down at the VenGrowth Funds shareholder meetings called for August 25, 2011 and the need to secure shareholder, regulatory, tax and court approvals for the merger of the VenGrowth Funds into GrowthWorks. There can be no assurance that all of these conditions will be satisfied or that the GrowthWorks Proposal will be completed on the terms proposed or at all. In addition, the completion of the GrowthWorks Proposal is subject to a number of risks.

The content of this press release is qualified in its entirety by, and should be read in conjunction with, the more detailed disclosure set out in the GrowthWorks Circular. Statements in this press release are based in part on publicly available information published by third parties. GrowthWorks has no reason to believe such information is inaccurate, however neither GrowthWorks nor its manager has taken steps to verify the information nor do they assume any responsibility for the accuracy of such information.

Commissions, trailing commissions, management fees and expenses all may be associated with investment fund purchases. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

Information in support of Public Broadcast Solicitation

GrowthWorks Canadian Fund Ltd. ("GrowthWorks Canadian Fund") is relying on an exemption granted by securities regulators to make this public broadcast solicitation of proxies. The following information is provided in accordance with such order and securities laws applicable to public broadcast solicitations.

This solicitation is being made by GrowthWorks Canadian Fund and not by or behalf of the management of The VenGrowth Investment Fund Inc., The VenGrowth II Investment Fund Inc., The VenGrowth III Investment Fund Inc., The VenGrowth Advanced Life Sciences Fund Inc. or The VenGrowth Traditional Industries Fund Inc. (together, the "VenGrowth Funds"). The address of the VenGrowth Funds is 105 Adelaide Street West, Suite 1000, Toronto, Ontario M5H 1P9, Canada.

GrowthWorks Canadian Fund has filed a Dissident Proxy Circular dated July 26, 2011 (the "GrowthWorks Circular") containing detailed information about the GrowthWorks merger proposal (the "GrowthWorks Proposal") which is available on www.growthworks.ca and SEDAR.com. You may call 1-800-268-8244 to request copies of the GrowthWorks Circular and proxy or voting instruction form ("VIF"). There can be no assurance that the GrowthWorks Proposal will be completed on the basis proposed or at all. The GrowthWorks Proposal is subject to a number of conditions including the need to secure shareholder, regulatory and court approvals for the merger, and is also subject to the condition that the proposed sale of assets of each of the VenGrowth Funds to Covington Fund II Inc. (the "Second Covington Proposal") be voted down at the meetings of the shareholders of the VenGrowth Funds called for August 25, 2011 (including any adjournments and postponements of those meetings (the "VenGrowth Meetings"). There can be no assurance that all of these conditions will be satisfied. In addition, the completion of the GrowthWorks Proposal is subject to a number of risks. The GrowthWorks Circular contains a detailed description of the terms and conditions of the GrowthWorks Proposal and the risks to completion of the merger.

Proxies for the VenGrowth Meetings may be solicited by or on behalf of GrowthWorks Canadian Fund by mail, telephone, telecopy, e-mail or other electronic means as well as by newspaper or other media advertising and in person by directors and officers of GrowthWorks Canadian Fund and directors, officers and employees of GrowthWorks WV Management Ltd. (the "Manager), the manager of GrowthWorks Canadian Fund, none of whom will be specifically remunerated therefor. Proxies will be solicited by or on behalf of GrowthWorks Canadian Fund from a VenGrowth Fund shareholder by means other than public broadcast, speech or press release only where a copy of the GrowthWorks Circular and form of proxy or VIF has been sent to such shareholder. GrowthWorks Canadian Fund may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on behalf of GrowthWorks Canadian Fund and may enlist certain investment advisors with clients that hold VenGrowth Fund shares to distribute the GrowthWorks Circular to their clients. These investment advisors will be offered a fee of $1.00 for each client the investment advisor contacts and sends the GrowthWorks Circular to and will be offered reimbursement for the time spent and expenses incurred in connection with the solicitation. Payment to such investment advisors will not be conditional on whether the client delivers a proxy or VIF for the VenGrowth Meetings or votes against the Second Covington Proposal.

All costs incurred for this solicitation will be borne by the Manager. Similarly, all costs incurred in connection with any solicitation of proxies by GrowthWorks Canadian Fund for any meetings of VenGrowth Fund shareholders requisitioned by GrowthWorks Canadian Fund (the "Requisitioned Meetings") will be borne by the Manager, to the extent not reimbursed by the VenGrowth Funds as required under applicable corporate laws. GrowthWorks Canadian Fund estimates that the total fees and costs paid to such soliciting agents in connection with the solicitations would not exceed $75,000, of which $nil has been paid to date.

To the knowledge of GrowthWorks Canadian Fund and its Manager, except as described below, none of GrowthWorks Canadian Fund, its officers and employees, the Independent Nominees named in the GrowthWorks Circular or any associate or affiliate or other "informed person" (within the meaning of Canadian securities laws) of GrowthWorks Canadian Fund or the Independent Nominees has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the VenGrowth Meetings or the Requisitioned Meetings or in any other material transaction or proposed transaction of the VenGrowth Funds since the commencement of the funds' most recent fiscal year. David Levi, a director and the President and Chief Executive Officer of GrowthWorks Canadian Fund, is the director and an executive officer and indirect shareholder of the Manager and Clint Matthews, the Chief Financial Officer of GrowthWorks Canadian Fund, is an executive officer and indirect shareholder of the Manager. If the GrowthWorks Proposal is completed, the net asset value ("NAV") of GrowthWorks Canadian Fund will increase, which will increase the NAV-based management and administration fees paid by GrowthWorks Canadian Fund to the Manager.

You may revoke your YELLOW proxy with an instrument in writing (which can be another proxy with a later date) executed by you and delivered to (i) Equity Financial Trust Company. by no later than 5pm on August 22, 2011, (ii) Computershare Investor Services Inc. by no later than 5:00 p.m. (Toronto time) on August 24, 2011 (iii) the registered office of the VenGrowth Funds by no later than 5:00 p.m. (Toronto time) on August 24, 2011 or (iii) the individual chairing the applicable VenGrowth Meeting on the date of the VenGrowth Meeting or any adjournment of the VenGrowth Meeting or in any other manner permitted by law. You may revoke your YELLOW VIF with an instrument in writing (which can be another VIF with a later date) executed by you and delivered to (i) Equity Financial Trust Company by no later than 5pm on August 22, 2011, or to (ii) Computershare Investor Services Inc. by no later than 5:00 p.m. (Toronto time) on August 24, 2011.

To view the appendix accompanying this press release, please visit the following link:

http://media3.marketwire.com/docs/720702.pdf

Contact Information

  • GrowthWorks Canadian Fund Ltd.
    David Levi
    President & Chief Executive Officer
    (416) 934-7700
    www.growthworks.ca