VenGrowth Capital Partners Inc. today announced the launch of its most diversified labour sponsored investment fund (LSIF) to date. The VenGrowth III Investment Fund Inc. will invest across key Canadian private business sectors including technology, traditional industries and life sciences.

The LSIF is 100% RRSP eligible and available in all provinces across Canada.

The launch of VenGrowth III coincides with the capping of The VenGrowth II Investment Fund Inc. (VenGrowth II) to maximize the long-term return potential for existing investors.

VenGrowth II is open to purchases until November 19. Launched in January 2000, it is Canada’s largest national LSIF with net assets of $489.5 million and over 100,000 investors as of Aug. 31, 2004.

VenGrowth III will focus on later stage venture capital opportunities in Canada’s leading small and medium- sized companies. The fund’s diversified investment approach is designed to reduce risk compared to funds focused on one industry or market sector. The broad areas of technology, traditional industries and life sciences all represent significant sectors in the Canadian venture capital industry — responsible for 62.6%, 18.8% and 18.6% of transactions since 1996, respectively(*).

“The VenGrowth III Fund will leverage all of the expertise that exists within our 26-person investment team, providing exposure to a broad spectrum of private equity investments in a single fund,” said David Ferguson, managing general partner of VenGrowth, in a release.

VenGrowth III will employ a variety of investment structures, including preferred equity and debt vehicles, to achieve its objective of long-term capital appreciation. Some investments will be traditional venture capital deals, while others will be structured as a blend of equity and subordinated loans that will generate regular interest income to the fund, known as “mezzanine financing”.

As an LSIF, The VenGrowth III Fund qualifies investors for a 15% federal tax credit on the first $5,000 invested each year. Ontario investors may receive an additional 15% provincial tax credit on the first $5,000 invested each year.

VenGrowth Capital Partners Inc. is a private equity firm with over $1 billion in assets under management.