Vancouver-based Discovery Management Capital Corp. has announced that shares of its British Columbia Discovery Fund, a venture capital investment fund, will no longer be sold.
The fund’s board of directors has determined it is best to maximize the value of the fund’s mature portfolio and any new investments to be made for the benefit of existing shareholders.
“The fund currently has $40 million in assets, with mature investments in eight companies, and over $4.0 million that it is required to invest,” says John McEwen, CEO of BC Discovery Fund. “Closing the sale of shares and eliminating further dilution is a typical evolution for venture funds that have achieved a mature portfolio.”
The discontinuation of the fund’s Class A shares are voluntary and effective immediately. The continuous distribution prospectus for the fund, which lapses on April 15, 2015, will not be renewed.
In addition, the fund’s board has also decided to present an alternative to its existing redemption model method of providing liquidity to its shareholders. The board is recommending that the fund adopt a dividend distribution model. The belief is that utilizing dividend distribution will allow all shareholders, regardless of the timing in divestment, to achieve the full liquidity available. This proposal will be put to a vote by shareholders at the fund’s next annual meeting.
The fund invests in companies in the information technology, communications and health and life sciences sectors.