Growth oriented Prince Edward Island businesses will have increased access to investment capital as a result of the creation of a new private sector investment fund. Combining the expertise of local PEI investors and Working Ventures Canadian Fund Inc., and in partnership with both the federal and provincial governments, PEI Capital Inc. will support growing PEI based businesses in accessing venture capital.
PEI Capital is owned and managed by 11 local investors and Working Ventures Canadian Fund. The private sector has invested a total of $955,500 in the Fund which will focus on small and medium-sized companies interested in expanding and/or restructuring their operations.
The private sector capital pool will be leveraged by a $300,000 investment in preferred shares by the Province of PEI and a $900,000 loan from the Atlantic Canada Opportunities Agency.
Catherine Callbeck, Premier of Prince Edward Island noted: "Our province is home to some of the most innovative, dynamic small companies in Canada. Encouraging and supporting the growth of private sector sources of equity and investment capital has been a priority of all governments for some time. That's one of the reasons why the birth of PEI Capital Inc. is so gratifying at this time."
George Proud, Member of Parliament for Hillsborough - speaking on behalf of Lawrence MacAulay, Secretary of State for ACOA - welcomed the official launch of PEI Capital Inc., a privately owned and operated venture capital firm whose objective is to invest in small scale start-ups, expansion and restructuring projects in emerging, as well as traditional, industries across the province.
"This represents an important step towards helping Island companies become more self-sufficient and successful," Mr. Proud said. "PEI Capital Inc. will provide a much-needed source of private sector funding to small and medium-sized business in an environment that's becoming more competitive all the time."
"There remains a critical need for equity-type financing in Atlantic Canada," Mr. Proud said. "Our approach has been to work with partners in the creation of a variety of private sector operated investment funds. Helping PEI Capital Inc. get off the ground is consistent with this approach."
According to PEI Capital's general manager, Irwin Dawson C.A., "Our intention is to invest in market oriented, growing PEI businesses. Individual investments will be in the $100,000 - $500,000 range. Our strategic alliance with Working Ventures will enable us to co-invest on an equal basis on projects up to $1,000,000. We will be looking for projects with high growth potential that will provide healthy returns to our shareholders. Typically, we will look to exit from an investment in four to seven years."
Working Ventures is a national labour sponsored investment fund sponsored by the Canadian Federation of Labour. "Our direct investment in PEI Capital is an important way for Working Ventures to get closer to investment opportunities in PEI and to connect along side 'smart money' in the community," says Working Ventures President Ron Begg.
"Our objective in partnering with PEI Capital is to generate co-investment activities so that we can significantly increase our investment commitment in PEI""Investment in small and medium size business offers the potential for good returns and also is the kind of investment that will generate jobs and exports in PEI," said Jim McCambly, President of the Canadian Federation of Labour and Chairman of Working Ventures. "But it is not the kind of investment that can be done from behind a desk in Toronto" according to Mr. Begg.
"We believe today's environment is the right time for a venture capital fund to be established on PEI to invest in PEI businesses," stated Mr. Dawson. "We have assembled a pool of capital for local investment and a board of directors with a broad cross section of industry experience that will be able to add value to our investments. The directors believe this is a vehicle to attract capital investment to PEI and slow the transfer of investment capital out of the province. I would say it is a strong expression of confidence by our local investors in the PEI business community."