(January 4 – 10:00 ET) – Triax Capital Holdings Ltd. says it has received regulatory approval in Ontario for its two New Generation Biotech Funds, Balanced and Equity, which are now available to investors.

The two new funds claim to be the only labour sponsored venture investment funds targeting genomics and the convergence of high tech and biotech, rather than conventional drug companies. The funds will focus on investing in Canadian companies that create and supply technologies, information infrastructure and services to these large, established drug and biotech companies.

Genesys Capital Partners Inc. will provide investment advice for the new funds, with Genesys co-founders Kelly Holman and Damian Lamb helping to develop the investment strategy. Holman and Lamb come from investment management backgrounds with MDS Capital Corp.

“The funds will invest in Canadian companies best positioned to profit from the genomics revolution and increasing global demand for innovative diagnostic, therapeutic and patient care products and services,” Holman said. “By leveraging Canada’s leadership position in basic genomics research and the commercial successes in the IT sector, Canada has become a rich, growing source of excellent investment opportunities in this area.”

Under the Ontario government’s Research Oriented Investment Fund legislation, the New Generation Biotech Equity Fund is the first LSIF to provide Ontario investors with a 35% tax credit based on an eight-year investment hold. The New Generation Biotech Balanced Fund provides Ontario investors with a 30% tax credit and 100% capital repayment after 10 years, along with the potential gains from the venture portfolio. Based on new government legislation, investment in either Fund allows an investor to increase their RRSP foreign content limit to a maximum of 50% of the total value of their RRSP.

The balanced fund provides full repayment of the investor’s principal by the end of December 2011. The fund will be closed to investors after March 1, 2001. Investments will be made in early stage biotechnology companies with less than $1 million in assets at the time of the initial investment. Capital repayment will be realized through the purchase of zero coupon bonds that mature in an amount equal to the subscription price paid. At the same time, investors receive 100% of the value of the underlying venture capital investments.

The equity fund will be invested in a diversified venture portfolio of promising companies at all stages in the development cycle. It intends to enhance returns by investing approximately 20-25% of the cash reserves in a note whose return is linked to the performance of the Nasdaq 100 index. Ontario investors are eligible for a 35% tax credit. The additional 5% tax credit, which will be paid in the form of a cheque to the investor directly from The Province of Ontario, is given to investors because the fund qualifies as a ROIF under new legislation.

The initial offering price for both funds is $10 a share with a minimum subscription of $500. Investors choosing the Balanced Fund are eligible for tax credits of up to $1,500 on a maximum $5,000 investment. Equity Fund investors are eligible for tax credits of up to $1,750.
-IE Staff