The Business Development Bank of Canada has selected the manager of a new private sector growth capital fund, Tandem Expansion Fund, BDC said Monday.

The fund will provide financing to Canadian technology growth companies and fills a significant void in the Canadian market for growth capital, BCC says.

BDC, which played a leading role in the creation of the fund, will invest $75 million. These funds were provided by the federal government, which allocated $75 million in the 2008 budget to support the creation of a new privately run venture capital fund.

In addition to the $75 million investment from BDC, Tandem has received preliminary commitments from a number of institutional and private investors and expects a first close on the fund of $300 million this summer.

“This new fund will provide important growth capital to enable promising Canadian technology companies to mature and compete in the global marketplace,” said Jean-René Halde, BDC president and CEO. “We believe the team at Tandem Expansion has the ideal background and experience to oversee this fund, and we look forward to working with them on this unique partnership.”

The general partner of the fund is Tandem Expansion, co-founded by two of Canada’s most experienced venture capital/private equity investors, Charles Sirois and Brent Belzberg. Sirois, who was recently appointed chairman of CIBC, founded Telesystem in 1984, which has since invested more than $1 billion in venture opportunities of all stages through its various funds. Belzberg is the founder and senior managing partner of TorQuest, one of Canada’s leading private equity firms with more than $700 million in private equity capital under management.

Sirois and Belzberg will co-chair the investment committee and provide strategic oversight and guidance to the fund.

Tandem’s day-to-day operations will be managed by a team led by four managing partners, each of whom has significant experience identifying, financing, building and maximizing the value of growth companies across a range of industries:

• David Bookbinder is a senior business executive with more than 25 years experience as an investor, operating executive and as a co-founder of Marsulex Inc., Chemtrade Logistics and SPI Polyols;

• André Gauthier was previously managing partner of Echo Capital, a venture capital firm, and served as executive vp and CFO of Telesystem International Wireless until it was sold to Vodafone in 2005;

• Christopher Legg was a partner at Argo Global Capital, a venture capital firm based in Boston, and was previously an investment banker in the technology group at Credit Suisse;

• Alex Moorhead was CEO and a co-founder of Loyalty Management Group, a London, England based company created in 2001, which was acquired by Groupe Aeroplan for $755 million in December 2007.

All four managing partners are Canadian and will be bringing significant international expertise back to Canada, BDC says. Tandem will be based in Toronto and Montreal, and expects to open an office in Western Canada in due course.

In general, Tandem Expansion Fund will invest in Canadian companies that have demonstrated technology development and commercial successes; have previously raised capital; have experienced management teams willing to work closely with Tandem; and have significant global growth opportunities.

IE