MONTRÉAL, Quebec, November 17, 2006 — The Honourable Maxime Bernier, Canada's Minister of Industry and Minister responsible for the Business Development Bank of Canada (BDC), and Raymond Bachand, Quebec's Minister of Economic Development, Innovation and Export Trade, today announced the establishment of the GO Capital co-investment fund, which will provide $50 million for business creation and start-up in Quebec's technology sector. Under this initiative, BDC will act as the fund's manager and investor. GO Capital investments in the selected firms will match, dollar for dollar, the investments by BDC, bringing the available capital to $100 million.
"I congratulate BDC and its partners for this initiative, which advances Canada's New Government's efforts to develop a more productive economy by investing in science and technology," said Minister Bernier. "Today's announcement represents the collaboration and investment of all stakeholders — governments and the private sector. These partnerships are essential. We need to continue with this approach. It's a concrete example of the open federalism that our government is putting into practice."
"By using effective tools such as FIER Partners and with the contribution of our biggest institutional investors and the tax-advantaged funds, the Government of Quebec intends to support the economic sectors that will help Quebec to strengthen its position in the face of global competition. The FIER Partners investment is part of the new stream of seed funding for technology firms, which meets a significant need in Quebec's venture capital market," said Minister Bachand.
The $50-million Fund includes $25 million from FIER Partners, $10 million from the Caisse de dépôt et placement du Québec, an additional $10 million from BDC, $3 million from the Solidarity Fund QFL, and $2 million from Fondaction, the CSN's development fund for co-operation and employment. BDC's total investment thus amounts to $60 million.
"Through its participation in this investment, BDC is working toward the objective of increasing the capital made available to businesses in the earliest stages of their development, and thereby encouraging the marketing of research output in Quebec's technology sector," said Jean-René Halde, President and Chief Executive Officer of BDC. "The Fund is the result of co-operation between the major venture capital partners. By entrusting us with the management of GO Capital, they are showing their confidence in BDC," he added.
"FIER Partners is very pleased to have contributed to the establishment of this fund intended to support young Quebec technology firms in search of financing, particularly firms working in the fields of advanced technologies, information technology, life sciences and telecommunications," said Sylvie Pinsonnault, managing director of FIER Partners.
This co-operative initiative involves the major players in Quebec's venture capital industry. GO Capital — which specifically targets businesses in the seeding and start-up phases — will help strengthen efforts already undertaken by BDC through its Technology Seed Investment Group, established in 2002. BDC seeks to adopt the same model in other Canadian provinces.
Information:
Isabelle Fontaine
Office of the Honourable Maxime Bernier
Minister of Industry
613-995-9001
Damir Croteau
Press Secretary
Office of the Minister of Economic Development, Innovation and Export Trade
418-691-5650
damir.croteau@mdeie.gouv.qc.ca
Eva Boucher-Hartling
Media Relations Manager, BDC
514-283-7929
eva.boucher-hartling@bdc.ca
Sylvie Pinsonnault
Managing Director
FIER Partners
514-844-9994
sylvie.pinsonnault@fier-partenaires.com
About BDC Venture Capital
BDC Venture Capital is a major venture capital investor in Canada. It is active at every stage of the company's development cycle, from seed through expansion, with a focus on technology-based businesses that have high growth potential and are positioned to become dominant players in their markets. BDC Venture Capital has been involved in venture capital since 1975 and has to date invested in more than 400 companies. It currently manages approximately $550 million in venture capital investments in the areas of life sciences, telecommunications, information technology, advanced technologies and fund investments.
Information: http://www.bdc.ca
About FIER Partners
FIER Partners is one of the three branches of the FIER (Fonds d'intervention économique regional, or regional economic intervention funds) program established by the Government of Quebec. It is a limited partnership whose initial capital of $180 million is provided by Investment Quebec's subsidiary IQ FIER ($90 million), and by three tax-advantaged funds: Solidarity Fund QFL ($50 million), Capital régional et coopératif Desjardins ($25 million) and Fondaction CSN pour la coopération et l'emploi ($15 million). FIER Partners has $80 million for supporting the creation of sector development funds that invest, in the form of equity or quasi-equity, in business start-ups. The limited partnership contributes one dollar for every two dollars provided by private investors. Accordingly, the total capitalization of sector funds could ultimately reach $240 million. FIER Partners also has $60 million for supporting funds that invest in companies through technology seed financing. Lastly, FIER Partners has $40 million for supporting development projects, especially those in the regions.
Information: http://www.fierpartenaires.com
About the Caisse de dépôt et placement du Québec
The Caisse de dépôt et placement du Québec is a financial institution that mainly manages the funds of public and private-sector retirement and insurance schemes. As of December 31, 2005, the Caisse had net assets of $122.2 billion. The Caisse invests in leading financial markets, as well as in the private sector and real estate markets. Its private-sector investment team focuses on companies showing strong growth and profit-making potential. The Caisse assists dynamic firms in various economic sectors, and offers them the full range of financing products, particularly through equity interest and loans. As of December 31, 2005, portfolios in the private investment sector had $10.9 billion in net assets.
Information: http://www.lacaisse.com
About the Solidarity Fund QFL
The Solidarity Fund QFL, which has net assets of $6.6 billion, is a development capital fund that invests Quebecers' savings through its RRSP program. Its investments in all sectors of the economy promote job creation and retention in companies, and advance Quebec's development. Directly or through one of the members of its network, the Fund is a partner in 1681 businesses. It now has over 573 000 shareholders. Alone or with other financial partners, it has helped with creation, retention and support for more than 116 644 jobs.
Information: http://www.fondsftq.com
About Fondaction CSN
Established in 1996, Fondaction invests in development capital to maintain and create jobs in Quebec. Its net assets, amounting to $442 million as of May 31, 2006, derive from the retirement savings investments of more than 64 000 shareholders. It is the financial partner of some 100 companies, and of partner and specialized funds. It focuses particularly on companies that have a participatory management structure, are involved in the social economy (self-managed firms, cooperatives or others), and are more environmentally friendly.
Information: http://www.fondaction.com
Backgrounder
GO Capital Fund, L.P.
The Fund
- The $50-million GO Capital venture capital fund supports the creation of companies in all sectors of science and technology in Quebec, including natural sciences, life sciences and information technology.
- The Fund will invest in companies emerging as the result of research and development efforts undertaken in universities, public-sector laboratories and private-sector initiatives.
- The GO Capital Fund is the outcome of a partnership between five organizations: FIER Partners ($25 million), BDC ($10 million) the Caisse de dépôt et placement du Québec ($10 million), the Solidarity Fund QFL ($3 million) and Fondaction CSN ($2 million).
BDC's Involvement
- BDC will be responsible for managing the partnership's investments.
- BDC will ensure that the GO Capital Fund contributes one dollar for each dollar that BDC invests in companies, bringing to $100 million the total funding given to businesses at the seed stage.
- The total capital provided by BDC is $60 million.
- BDC is in discussions to develop the same strategy in other Canadian provinces.
Positioning of the GO Capital Fund in the Venture Capital Industry
- The GO Capital Fund will advance the creation of Quebec technology firms, which have seen investment fall heavily from the peaks reached in 2000 and 2001.
- The GO Capital Fund will be particularly active in pre-seed financing for companies — that is, at the time a company is established. Among other things it will help in the protection of intellectual property, forming management teams, technical and commercial product demonstration, and prototype development.
- Offering investments from a single fund makes it possible to better coordinate the role of the investor in companies, from their creation to their growth phase.
- Through GO Capital, BDC and its partners seek to stimulate the marketing of research results in Quebec.
BDC and Technology Seeding
- Since BDC's Technology Seed Investment Group was created in 2002 to respond to market needs, the group has invested in 37 businesses at the seed stage in Canada. Of these companies, 21 emerged from the context of universities or research laboratories.
- To date, BDC has provided $72 million to these firms. In total, including subsequent investments, the companies have received $225 million in venture capital financing.
- While activity at the seed stage attracts little in the way of investments, BDC's Technology Seed Investments Group has established a portfolio of 14 businesses in Quebec.
- The objective of BDC's Technology Seed Investments Group is to guide the businesses in its portfolio toward marketing of their intellectual property and the next phase of venture capital financing. To date, more than 1000 investment opportunities have been examined by the Group in Canada, testifying to a clear market need.