David Levi has given up his dream of buying Crocus Investment Fund. But he’s not going to abandon the Manitoba market.

The CEO of Vancouver-based GrowthWorks Capital says he is disappointed by the recent Court of Queen’s Bench decision denying a request by the Manitoba Federation of Labour to hold a special meeting of Crocus shareholders. The move effectively ends Levi’s 18-month-long bid to buy the failed fund. It also allows Crocus’s receiver to continue selling off the fund’s ownership stakes in investee companies.

“People who have a statutory right to call a meeting have been thwarted,” Levi says. “Unfortunately, it was the group of people preparing to put our proposal forward. But we’re continuing to move ahead. We’ve made a commitment that we’re coming to Manitoba.”

Levi has instructed his counsel to prepare the paperwork to create a new labour-sponsored fund in the province, possibly in time for the 2007 RRSP season.

“We understand all the rules of applying for such a fund and anticipate being able to meet them all. We believe the Manitoba market needs a second fund. We want there to be two doors to knock on for venture capital,” he says.

ENSIS Growth Fund, Crocus’s long-time competitor, has had the retail venture-capital space to itself for the past two RRSP seasons. Last year, it raised $6.2 million, down from $10 million in 2005. Before the bloom came off the LSIF rose, ENSIS was raising about $20 million a year; Crocus had had several years of topping the $30-million mark.

Levi says a GrowthWorks fund in Manitoba — it doesn’t yet have a name but, he says, it’s a safe bet it won’t be named after a flower — can complement ENSIS’s offering.

“We tend to be earlier-stage, equity-based investors. We’re a little different than what ENSIS does, which is latter-stage and more debt-oriented,” he says.

Levi admits convincing Mani-toba investors to put their faith and money in venture capital will be a tough sell because of Crocus’s high-profile collapse.

“Venture capital is coming back,” he says. “Our rates of return have been 7%-15% a year. We think that will be well received in the province. We anticipate that over the next two to three years, people will return to the market if they see a fund manager who can provide them with good rates of return.”

GrowthWorks, which has been registered as a portfolio manager in Manitoba since this past summer, hires local people to manage its funds.

“All the investment and marketing decisions will be made by our staff there,” Levi says.

GrowthWorks is the third-largest LSIF in the country. It manages almost $900 million in assets and has operations in British Columbia, Saskatchewan, Ontario and three of the four Atlantic provinces.

Russ Holmes, the Deloitte LP partner in charge of the Crocus receivership, says the situation hasn’t changed appreciably since his last quarterly report at the end of the September, which said about 70% of Crocus’s positions had been sold off. That includes a 9% interest in Winnipeg-based Wellington West Capital Inc., which was repatriated earlier this fall for between $5 million and $10 million.

“We’re not doing anything different than previously. We’re carrying on according to the mandate of the court order,” Holmes says.

He says it could take another three-and-a-half years — or five years since being appointed receiver — for the Crocus file to be wound down completely. IE