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The Government of Canada has invested in the Kensington Venture Fund, a private sector-led fund of funds, as part of its venture capital action plan (VCAP).
It’s the third fund of funds established under the VCAP, which had its initial closing with $160 million in commitments—$107 million from institutional, corporate and individual investors, alongside $53 million from the Government of Canada.
The fund will emphasize investment opportunities in clean technology and energy technology, as well as information and communications technologies, and will invest primarily in early- and mid-stage venture capital funds and directly in companies across Canada.
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Kensington Capital Partners has been selected by lead investors to act as the general partner for the fund, following a fair and competitive selection process led by the Venture Capital Expert Panel. Investment decisions will be made by Kensington Capital Partners based on market-based principles in order to maximize returns.
The Government of Canada has agreed to make a capital commitment of $1 for every $2 committed by private sector investors to the new fund, up to a maximum of $100 million. The fund will seek additional investors to reach its target size and anticipates holding a second closing in 2015.
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“The VCAP is certainly gaining momentum,” says Canadian Venture Capital and Private Equity Association CEO Mike Woollatt. “The Kensington Venture Fund simultaneously tackles two important aspects of VC funding in Canada; it focuses on Canada’s strengths in clean technology, energy technology and ICT, while providing capital for early- and mid-stage ventures, which are chronically underfunded.”
The initial partners in the fund are BDC Capital Inc. (on behalf of the Government of Canada), BMO Financial Group, CIBC, OpenText Corp., Richardson GMP, Royal Bank of Canada, Scotiabank, TD Bank Group and individual investors.