Covington Capital Corporation Announces $5 Million Toward The VenGrowth
Transaction
TORONTO, Nov. 19 /CNW/ - Covington Capital Corporation ("Covington") announced today that it has agreed to pay $5 million toward termination costs associated with the acquisition of the five VenGrowth Funds.
In addition to Covington's $5 million, it will still honour the lower management fee structure that it negotiated with the Board of Directors of the VenGrowth Funds and outlined in the Information Circular.
"It is clear to us that shareholders are sensitive to the upfront costs associated with this transaction and, as such, we have acted on that feedback," states Phil Reddon, Managing Partner, Covington Capital Corporation. "Covington feels strongly that Fund II is not only the best fit for the VenGrowth Fund portfolios but that it is also well positioned to provide VenGrowth shareholders with enhanced liquidity and the potential for superior investment returns on a go forward basis."
On October 12, 2010 Fund II put forth a proposal in which the Fund would acquire the assets of VenGrowth five retail venture capital funds (The VenGrowth Investment Fund Inc., The VenGrowth II Investment Fund Inc., The VenGrowth III Investment Fund Inc., VenGrowth Traditional Industries Fund Inc., and the VenGrowth Advanced Life Sciences Fund Inc. (collectively the "VenGrowth Funds").
"Covington was chosen as the best firm to acquire the VenGrowth Funds after discussions with potential acquirers followed by extensive due diligence and negotiations to ensure that a transaction was structured to benefit the majority of shareholders. Covington's proposal was accepted by VenGrowth's Board of Directors based on its overall merit and value to all VenGrowth shareholders." says David Ferguson, Managing General Partner, VenGrowth.
"This transaction was structured to benefit shareholders and capitalize on Fund II's strong performance track record, low management expense ratios, and liquidity position," said Reddon. "We believe this announcement enhances an already compelling structure and underscores our commitment to the investors."
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 further information:
Fiona Robertson
EVP Sales and Marketing
Covington Group of Funds
416-365-9155
[email protected]
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