OMERS Capital Partners Plays Key Role in new Venture Capital Fund

The new $205-million Ontario Venture Capital Fund (OVCP) opened for business on June 11, 2008. Representatives from OMERS Capital Partners and OMERS along with the Minister of Research and Innovation, John Wilkinson and Minister of Finance, Dwight Duncan, with their investment partners, rang the opening bell at the Toronto Stock Exchange.

The Ontario Venture Capital Fund is a limited partnership between the Ontario government and leading institutional investors, such as OMERS Capital Partners, to invest primarily in Ontario-focused venture capital and growth funds. The OVCF was established to address the lack of investment funding in Ontario for innovative, high-potential companies. Without access to long-term investment capital and support, these companies cannot grow and create jobs in Ontario.

"We are pleased to be an integral part of this initiative and we look forward to enhancing the market for venture and growth capital investments in Ontario," said Paul Renaud, CEO of OMERS Capital Partners.

The Ontario government is investing $90-million in the $205 million fund; the balance is coming from OMERS Capital Partners, RBC Capital Partners, Manulife Financial, the Business Development Bank of Canada and TD Capital. The partners unanimously selected TD Capital Private Equity Investor to manage the fund.

This fund is precisely what is needed to support companies with great potential but limited start-up resources, said Michael Nobrega, OMERS pension fund President and CEO. It is in the best interests of the pension fund and for our long-term investment goals to see them thrive.

Between 80 per cent and 100 per cent of the capital will be invested in Ontario-based and Ontario-focused funds; up to 20 per cent will be available for direct co-investments alongside fund managers, in Ontario-based companies.

The OVCF will support emerging, innovative companies that need both capital and entrepreneurial expertise from investors who are prepared to take on higher risks in pursuit of higher returns.

Companies are most in need of venture capital to survive and prosper during start-up and growth phases. The average survival rate for start-ups is quite low, often because they lack the experience and skills needed to attract and partner with long-term investors. To maximize the impact on the Ontario venture capital sector, and tap into investment expertise in the province, the fund needs to support the best venture capital funds - those with a track record of identifying and supporting successful, high-growth innovative companies. By investing in those funds, the OVCF will help strengthen the entire sector and make it attractive to ongoing, sustainable investment.

"This partnership will act as a catalyst in the venture capital community. Together, we are investing in Ontario's future - helping Ontario's innovative thinkers take their ideas to the next level, and ensuring that innovative companies can access the capital they need to seize global market opportunities while creating jobs right here in Ontario," said Minister of Research and Innovation John Wilkinson.

The OVCF's objective is to generate superior, long-term risk-adjusted returns for its investors, thereby promoting a globally competitive venture capital industry in Ontario - capable of supporting and developing promising, innovative Ontario-based enterprises.

The fund will begin investing in 2008 and, subject to prevailing market conditions, is expected to have an active investment period of between three and four years.

The partners will also seek additional investors to grow the fund to $270-million and anticipate holding a second closing later in 2008.

In addition to providing investors with superior long-term returns, the fund will help to:

• promote the creation of a globally competitive venture capital industry in Ontario which supports Ontario-based innovative companies
• increase the supply and effective deployment of investment capital in Ontario by supporting top-performing fund managers
• increase the level of institutional investments in venture capital in Ontario
• improve the flow of capital at all stages of investment in innovative Ontario companies.