Toronto-based Covington Capital Corp. will re-open Covington Fund II Inc. to redemptions in the first quarter of 2018, a delay of up to 90 days from the fund’s originally planned re-opening.

Covington Capital reports that it’s still engaged in the sales process with several private portfolio companies and the sale of these companies will now be expected to close in early 2018.

Once the fund re-opens, the firm anticipates redeeming up to 20% of the fund’s net asset value as of Sept. 1, 2017, which marks the beginning of the current financial year. This is the required annual redemption amount as described in both the governing legislation and in the fund’s prospectus disclosure.

When the fund re-opens, redemptions will continue to be honoured in the order in which they are received.

Following the Ontario government’s 2015 decision to discontinue tax credits for the labour-sponsored investment funds (LSIF) program, the fund, in addition to other LSIF market participants, experienced an elimination of cash subscriptions, forcing liquidity to be derived solely from the sale of the fund’s portfolio investments, the firm says.

Covington Fund II has acquired or merged with eight LSIF funds since 2011, most notable is the merger with VenGrowth funds that year, in order to consolidate assets, achieve economies of scale to maintain management expense ratios and to provide liquidity in the absence of new subscriptions to manage the return of capital to shareholders.

Since the completion of the VenGrowth transaction on Sept. 2, 2011, the fund has honoured approximately $208 million in redemptions and redeemed for cash more than 60% of the fund’s outstanding shares.