Ventures West raises VC fund

by Laura King in Toronto

Canada's Ventures West Management Inc. said Monday it has raised C$158 million ($120 million) of new venture capital from Canadian institutional investors in the first close of its new Ventures West 8 fund, making it the biggest VC fund raised this year.

The deal tops Jefferson Partners' C$150 million in new venture capital from Canadian and U.S. institutional investors in May.

Investors in Toronto-based Ventures West 8 are British Columbia Investment Management Corp., Business Development Bank of Canada, Canadian Pension Plan Investment Board, EdgeStone Capital Partners, Ontario Municipal Employees Retirement System and the Teachers' Merchant Bank, the private equity arm of the Ontario Teachers' Pension Plan.

In a statement Monday, Nov. 3, Ventures West said the fund will invest in early-stage biotechnology, communications, energy technology and IT companies across Canada.

Ventures West spokeswoman Christine Ramsay said the company is not revealing how much each investor contributed to the fund, but in a separate statement the CPP Investment Board said it is committing C$50 million to Ventures West 8.

Kirk Falconer, research director for Toronto-based VC tracking firm Macdonald & Associates, said Monday that Ventures West was helped by its credibility as a 35-year-old company.

"They've been around for a couple of decades and they've never had any trouble raising institutional money - that's strictly an issue of their track record."

Falconer said Ventures West's announcement is significant, given the depressed private equity markets.

"We had an especially busy fundraising period in 2000 and 2002 and when you look at those years, this Ventures West fund stands up pretty well as an institutionally supplied, balanced fund."

Ventures West president Robin Louis said in a statement that the firm has most of Canada's big pension funds as investors.

"The venture capital industry has seen a sharp decline in investment and fundraising over the last two years," Louis said. "These institutions are very sophisticated investors and their investment in Ventures West 8 confirms their commitment to Ventures West, to the Canadian private equity marketplace and to venture capital in general."

Ventures West's previous fund had its final closing in November 2000 and has invested in more than 30 companies, including Convedia Corp., INEA Corp., Polyfuel Inc., Salmedix Inc., SiberCore Technologies Inc. and Xenon Genetics Inc.

Ventures West, founded in 1968, has invested more than C$400 million in more than 125 technology companies.

The Deal.com - Posted 03:40 EST, 3, Nov 2003