GrowthWorks Atlantic Venture Fund Announces Amendment to Management Agreement
HALIFAX, Nova Scotia, Feb. 04, 2019 (GLOBE NEWSWIRE) — GrowthWorks Atlantic Venture Fund Ltd. (the “Atlantic Fund” or “Fund”) announced today it received regulatory approval to amend the terms of its Management Agreement with GrowthWorks Atlantic Ltd. (the “Manager”).
While the operating expenses of Atlantic Fund have been reduced by over 50% since 2015, Atlantic Fund and the Manager have continued to seek alternatives to further reduce operating expenses to extend the timeframe for seeking and executing exit transactions of the venture portfolio in the normal course and provide for additional distributions under the Pro Rata Redemption Plan (“PRRP”). Accordingly, Atlantic Fund and the Manager agreed to amend, subject to shareholder and regulatory approval, the Management Agreement to reflect a revised compensation arrangement for the Manager with the goal of further aligning the interests of Atlantic Fund’s shareholders and the Manager.
Atlantic Fund shareholders approved the new compensation structure and the related changes to the management agreement at the Fund’s Annual General Meeting on December 11, 2018.
The key terms of the new compensation structure are as follows:
- Elimination of the 1% Management Fee paid by Atlantic Fund to the Manager;
- Elimination of the IPA Dividend by the redemption of the IPA Shares;
- A 50% reduction in the compensation and expenses of employees of the Manager in connection with Fund business currently covered by Atlantic Fund in its annual operating budget; and
- Accrual of 7.5% of the value of net proceeds (net of transaction specific expenses such as legal fees) from any venture asset divestment transactions (“Divestment Amount”) payable to the Manager. The Divestment Amount would only be paid to the Manager concurrent with a declaration (and payment into trust) of a cash distribution to shareholders (whether under the PRRP) in an aggregate amount at least equal to the amount of the Divestment Amount paid to the Manager.
All other material terms of the Management Agreement remain the same. An amendment reflecting the amended Management Agreement will be filed on SEDAR concurrently with the filing of this release.
Forward Looking Statements: This press release contains forward looking statements about Atlantic Fund’s ability to assess projected liabilities, anticipated operating expenses and future costs savings and aligning the interest of shareholders and the Manager. These statements are based on beliefs and assumptions of management of Atlantic Fund at the time the statements are made, including beliefs and assumptions about future market conditions, projections on liabilities and operating expenses and future cost savings and the Fund’s ability to manage its available cash resources performance, and other risks and uncertainties disclosed in Atlantic Fund’s most recent filings posted on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless required by law, neither Atlantic Fund nor its manager assumes any obligation to update any forward-looking statements or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or other factors. No assurance can be given as to the timing or any amount of funds that will available for future distribution to shareholders under the Pro Rata Redemption Plan or otherwise or that Atlantic Fund will be able to complete an orderly realization of value (at current values or otherwise).
CONTACT: Reference: Peter Clark President & CEO GrowthWorks Atlantic Venture Fund Ltd. Suite 1502 – 1959 Upper Water Street Halifax, Nova Scotia B3J 3N2 Tel: (506) 449-2969