Market downturn fuels opportunity for Covington Fund II

$20.75 million invested in eight Canadian companies over nine months

By: IE Staff
November 12, 2002 November 12, 2002
16:55

During the first three quarters of 2002, the Covington Fund II labour sponsored venture capital investment fund financed eight Ontario-based companies positioned for growth and profitability.

The companies financed in this latest round of investment are prime examples of some private enterprises that have all the key business fundamentals required to fuel expansion of value and superior returns for investors.

Covington investment managers Grant Brown and Chip Vallis say the current public market downturn has created exceptional opportunities for venture capital investment.

“Current market conditions present long term venture capital investors with opportunities we would have been fighting the public markets for two years ago,” said Vallis in a news release. “Over the next 18 months we feel we will be able to add very strong companies to the portfolio from across all sectors of the economy.”

Covington Fund II focuses on investing in later stage private companies with solid expansion profiles, across 10 economic sectors. This diversified investment strategy combined with Brown and Vallis’ value management approach minimizes risk.

With valuations now substantially lower, investors are acquiring companies at reasonable prices rather than the unsustainable multiples seen when the market was at its peak.

The eight Ontario-based companies that received new and follow-on financing from the Covington Fund II during the first three quarters of 2002 include high growth enterprises operating in the manufacturing, environmental, financial services and technology sectors.

The companies are: