VenGrowth Fund Merger with Covington Capital
ACFO President Milt Isaacs is pleased to advise members that, at the Special General Meeting of VenGrowth Fund shareholders on August 25th, an overwhelming majority endorsed the sale of the VenGrowth fund to Covington Capital Corporation.
“This is a great victory for us.” says Isaacs. “It helps ensure our financial sustainability for years.”
ACFO is a primary sponsor of VenGrowth Asset Management, at one point the largest labour-sponsored investment fund (LSIF) in Ontario. This sale delivers a favourable resolution to the long, protracted process where competing parties publicly fought for control over the VenGrowth funds (for further background information, see this article from the Globe and Mail).
Our Association has participated in the LSIF venture capital sector in Ontario for nearly twenty years. LSIFs have been a source of revenue for ACFO, which has helped keep membership dues among the lowest in the federal public service.
The LSIF sector has faced numerous challenges in the past few years. The most recent one came from the Ontario government’s decision to eliminate provincial tax incentives for LSIFs in 2007.
ACFO president, Milt Isaacs was successful in his lobbying efforts to reverse that decision. The government decided that, instead of an immediate elimination of the tax credit, it would phase it out over several years. This prolonged the benefits ACFO received from LSIFs and provided time for the funds to restructure.
This merger with Covington further protects ACFO’s financial position, and builds a better framework as we move forward in the LSIF industry in Ontario and possibly throughout Canada.
The VenGrowth sale process highlights the talents and added value that individuals at ACFO bring to the table. When examining an issue, FIs are trained to consider multiple options, evaluate them carefully, and present the most appropriate solution for further consideration.
ACFO is committed to managing its financial resources effectively, and will continue to pursue opportunities to keep members’ fees amongst the lowest in the federal public service.
For further information on this matter, please contact Milt Isaacs at (613) 728-0695 or email misaacs@acfo-acaf.com.
