Investors in VenGrowth Advanced Life Sciences Fund Inc. will now receive funds through an annual distribution of the surplus proceeds from the disposition of portfolio companies, rather than through weekly redemptions, VenGrowth Asset Management Inc. said Thursday.

“In light of extended adverse exit market conditions for private portfolio companies, the Board of Directors of the Fund has determined that it is in the best interest of shareholders to halt redemptions and adopt an annual distribution policy, effective immediately,” VenGrowth said in a news release.

“The Board and the fund manager believe that this measure will prevent any near and mid-term liquidity challenges, help achieve optimal exit values for maturing portfolio companies once exit market conditions improve, and ensure that proceeds generated from those exits are returned to all shareholders.”

The Independent Review Committee of the fund has recommended the change to an annual distribution policy.

“It was not easy for us to arrive at this decision, but we strongly believe that this move to an annual distribution policy is in the best interest of our shareholders. It enables us to balance the desire to generate annual distributions to shareholders, while ensuring that a fair value for the excellent private portfolio companies can be obtained in the market place,” said David Ferguson, VenGrowth managing general partner.

VenGrowth blames the recession for hampering the ability of the fund to sell promising investments. Not a single Canadian life sciences company has been able to complete an IPO since October 2007, it notes. Similarly, M&A activity involving Canadian life sciences companies has decreased dramatically.

IE