VenGrowth Asset Management Inc.

VenGrowth Asset Management Inc.

November 25, 2010 22:23 ET

VenGrowth Funds' Shareholders Approve Merger Plan with Covington Fund II

TORONTO, ONTARIO--(Marketwire - Nov. 25, 2010) - VenGrowth Asset Management is pleased to announce that shareholders of each of the VenGrowth Funds voted strongly in favour of the proposed sale of the fund's assets to Covington Fund II Inc. ("Covington II). Shareholders for each of the The VenGrowth Investment Fund Inc. ("VenGrowth I"), The VenGrowth II Investment Fund Inc. ("VenGrowth II"), The VenGrowth III Investment Fund Inc. (VenGrowth III), The VenGrowth Advanced Life Sciences Fund Inc. ("VenGrowth ALSF"), and The VenGrowth Traditional Industries Fund Inc. ("VenGrowth TI") (collectively the "VenGrowth Funds") were asked to vote in favour of the transaction at their respective annual general and special meetings held today.

The vote was 83% in favour for VenGrowth I, 81% in favour for VenGrowth II, 86% in favour for VenGrowth III, 83% in favour for VenGrowth ALSF, and 70% in favour for VenGrowth TI. There was more than a 600% increase in shareholder participation as compared to prior year's meetings. "Despite the overwhelming approval and voter turn- out, a dissident proxy solicitor intends to continue its efforts to negate this approval. Although there are still things to be done, we are confident that the transaction will close." says Allen Lupyrypa, Managing General Partner, VenGrowth.

Shareholders of Covington II, together with New Generation Biotech (Equity) Fund Inc., the other fund party to the transaction, also approved the transaction at their respective annual and special general meetings today.

The transaction is still subject to regulatory, court and other approvals.

The transaction will result in one of Canada's largest and most highly diversified retail venture capital funds. The combined Covington II fund is expected to have a net asset value of $425,000,000 and will hold a venture portfolio numbering approximately 50 to 55 investments.

"Shareholders clearly recognized the key benefits of the transaction including a large and highly diversified portfolio, enhanced ability to provide follow-on funding to portfolio companies, a larger fund structure that will result in lower MERS (management expense ratios) in the future and additional choices over what shareholders can do with their shares." says David Ferguson, Managing General Partner, VenGrowth. "Under this new combined platform, we believe that Covington, with its years of experience in both institutional and retail venture capital, and its strong performance track record, has the capability to deliver performance to shareholders." added Ferguson.

Covington II will continue to remain open to new fund raising and to roll-overs. "The consolidation of seven funds, with its economies of scale and mature portfolio, provides a very attractive retail venture capital model to both current and future investors on a go forward basis," states Scott Clark, Managing Director, Covington.

About VenGrowth Asset Management Inc.

A premier Canadian private equity investment group, VenGrowth Asset Management builds innovative companies into global successes. Since 1982, we have invested over $1.3 billion in more than 200 North American companies, working alongside business owners to maximize potential. For more information, visit www.vengrowth.com.

About Covington Group of Funds

Established in 1994, Covington Capital Corporation is one of Canada's largest providers of venture capital investment funds. Managing over $200 million in assets, Covington provides Canadians with the ability to access venture capital investment opportunities via their suite of retail venture capital product offerings. For more information, visit www.covingtoncap.com.

This document is for information purposes only and should not be relied upon is investment advice. Information contained herein is subject to change without notice and VenGrowth Asset Management is not responsible for any inaccuracies or to update this information. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Contact Information

  • Media Inquiries:
    VenGrowth Asset Management Inc.
    Wesley Ollson
    Director, Product Management and Communications
    (416) 628-9263
    wollson@vengrowth.com