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Founder of collapsed $1.7 billion mutual fund charged with fraud

Founder of collapsed $1.7 billion mutual fund charged with fraud

The founder and manager of a $1.7 billion mutual fund that collapsed very last year has been charged by federal prosecutors with securities fraud and obstruction of justice for allegedly inflating fund asset values to hold trader income flowing, then falsifying data to conceal the improprieties. 

The Infinity Q Diversified Alpha Fund halted investor redemptions in February 2021, approximately 7 years immediately after it was co-founded by James Velissaris, 37, its chief expenditure officer. A govt inquiry started, Velissaris stepped down and the mutual fund and a parallel hedge fund he oversaw commenced liquidating. 

It was a rare example of a massive mutual fund failure amid a roaring bull marketplace. And the collapse ensnared billionaire investor David Bonderman, co-founder of TPG, a huge private-equity firm that went public this year. The Bonderman Spouse and children was a big trader in Infinity Q Cash Management, the financial investment firm overseen by Velissaris, regulatory documents show. Velissaris had labored for the Bonderman household before he co-started Infinity Q Cash Management. 

Prosecutors stated Velissaris inflated the worth of the funds’ holdings by $1 billion and manipulated the results for at least four many years to mask poor performance. At particular moments for the duration of 2020 when the pandemic was roiling the money marketplaces, the funds’ real values have been fifty percent what investors had been told they were, prosecutors mentioned. Certain positions held by the mutual fund “had been reported at mathematically not possible valuations,” according to a civil grievance filed in opposition to Velissaris on Thursday by the Securities and Exchange Fee.

In addition to securities fraud and obstruction of justice, Velissaris has been charged with wire fraud and lying to auditors. Each charge carries a utmost sentence of 20 a long time in prison. 

The SEC also accused Velissaris of pocketing $27 million in administration costs produced by his incorrect valuation of the funds’ holdings. The SEC said its investigation into the debacle is continuing.

Mark Schonfeld, a attorney at Gibson Dunn who represents Velissaris, presented this assertion: “James managed investments at Infinity Q with the optimum integrity in accordance with all relevant ideas. We seem ahead to vindicating James, who has been scapegoated by others who will have to remedy in court for their personal compliance failures and the losses incurred by their irresponsible liquidation of the portfolio.”

A spokesman for Infinity Q Capital Administration declined to comment.

The resources overseen by Velissaris ended up supposed to crank out returns that did not transfer in tandem with the total inventory and bond markets. Lots of of their holdings concerned bets on exotic investments acknowledged as derivatives, since they are derived from other securities. The resources claimed once-a-year returns of approximately 9.5 p.c ahead of they folded.

The Bonderman ties ended up a providing point for Infinity Q a presentation from the fund boasted that its buyers would get access to the identical “alternate investment decision tactics at first developed” for the affluent loved ones. Very last yr, an Infinity Q Money Administration spokesman said the Bonderman family was a passive investor in the firm and experienced no handle above its investments. The family members misplaced “a significant amount” in the collapse, the spokesman reported. TPG, the personal-equity firm cofounded by David Bonderman, did not react to a request for remark from Bonderman on the prosecutors’ fees.

Prosecutors said the mispricing of property took location from at the very least 2017 into 2021. About March 2020, with the resources in a tailspin, Velissaris sought a $100 million financial loan from the house owners of Infinity Q Cash Administration, the SEC reported. The loan was not produced. 

Prosecutors’ allegations of mispriced assets in the Infinity Q portfolios echo former difficulties at the mutual fund. In 2016, the fund was late in submitting a regulatory report because an independent pricing support experienced been not able to “support” some of its valuations. Immediately after that incident, the fund’s trustees, billed with overseeing it for buyers, noted they had “worked closely” with Infinity Q Cash Management “to be certain that the correct resource documentation for its valuation determinations are preserved, and the adviser’s trade allocation oversight was enhanced to superior establish any glitches or misallocations.”

Allegations that Velissaris manipulated returns and asset values for 4 several years following that incident point out the fund’s trustees were being furnishing inadequate oversight, stated Marshall Glickman, an aggrieved trader in the Infinity Q fund. “Why was Velissaris in a position to misprice the property for 4 decades?” he questioned. 

Also disturbing, Glickman said, is the total of investor money at this time becoming held again by the fund trustees to deal with litigation and other expenses incurred by the fund. Final yr, the trustees established aside $750 million, expressing the greatest element was for attainable liability in relationship with litigation filed from the Infinity Q fund. The set-apart is vital, the trustees reported, because insurance policy held to protect lawsuit charges might be insufficient, and it does not cover specific costs, together with those people linked with the liquidation and federal government investigations.

As a outcome of this set-aside, Glickman reported he has gained only 30 percent of his financial commitment back again. 

Fund traders harmed in the alleged fraud are also having to pay out roughly $900,000 a month in fees, records exhibit. Among June 2021 and February, these expenses totaled $7.24 million. “This could drag on for a extended time,” Glickman stated. “If this circumstance usually takes three decades, that is $36 million gone correct there.”

Glickman mentioned he believes the SEC really should have appointed an independent group to control the fund’s liquidation and disbursements, in its place of making it possible for the trustees who had been on hand in the course of the alleged fraud to oversee it. 

An email to the fund’s trustees was not returned. Late previous calendar year, they approved the creation of a exclusive committee consisting of two new trustees to look into and go after likely claims on behalf of the fund and its traders.

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Cathie Wood’s Ark plans to launch new fund that invests in private innovation companies

Cathie Wooden is doubling down on her conviction in disruptive innovation — but this time, with a different solution.

The star fund manager who runs the well-liked Ark Spend loved ones of exchange-traded money will foray into non-public corporations with a new investment decision method that focuses on illiquid securities and limits investor exits in situations of volatility, a Feb. 3 filing by the organization with the U.S. Securities and Trade Commission discovered.

A spokesperson for Ark Devote verified to Yahoo Finance that the investment decision administration business filed for the fund but declined to provide additional data while the application undergoes overview by the SEC.

The move will come all through a tough time for Ark’s other cash, which include its tech-weighty flagship Ark Innovation ETF (ARKK), which have been wrought by a broader promote-off in the engineering sector as buyers bracing for the Federal Reserve to stop its straightforward dollars guidelines dial back again on danger and dump superior-advancement property in favor of value stocks.

According to the SEC doc, Ark Investment Management utilized for a closed-finished interval fund, a kind of financial commitment strategy that does not trade on an exchange and periodically delivers to repurchase its shares from buyers. The Ark Venture Fund, what the new fund is dubbed, will perform quarterly repurchase delivers for concerning 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the fund’s superb shares of effective desire at web asset worth, for each the submitting.

Wood’s new fund is set to mimic the firm’s investments in disruptive tech themes that her ETFs comprise but in private firms, permitting for for a longer period maintain periods on trader property throughout durations of market place turbulence. Genomic revolution companies, automation transformation firms, electricity transformation companies, synthetic intelligence firms, up coming generation world wide web businesses and fintech innovation firms — which include people targeted on crypto and blockchain — are among the Ark Venture’s possible investments, according to the firm’s SEC filing.

“In searching for to realize its investment decision aim, the fund may possibly commit, without restrict, in privately put or limited securities, illiquid securities and securities in which no secondary current market is conveniently offered, such as those people of private corporations,” Ark observed in the submitting.

ARKK, the firm’s flagship ETF, has lost additional than half its value from its peak as anxieties of a ramp-up on desire fee hikes by the Fed send out progress stocks cratering. The fund ended past 12 months down 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} immediately after putting up a return of 150{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in 2020. Ark’s other funds are also down additional than 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this 12 months.

Ark Innovation was typically flat on Monday, down a little bit by .62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $72.30 share as of 12:11 p.m. ET. -.45 (-.62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996})

—

Alexandra Semenova is a reporter for Yahoo Finance. Comply with her on Twitter @alexandraandnyc

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Distressed Hotel Deals Almost Within Reach for Banyan’s BLEV Fund

Investors are at last bidding on some of the first resort attributes available for sale soon after currently being damage in the crisis brought about by the coronavirus pandemic.

Because the pandemic started in March 2020, several accommodations have earned a portion of their usual income—especially if that revenue came mostly from company travellers. Several buyers right away noticed an opportunity to get inns at lower price. But much more than a 12 months afterwards, really handful of distressed hotel qualities have been out there to purchase.

Till now. 

Banyan Investment decision Group, based in Atlanta, Ga, is now in the “best and ultimate offer” stage of bidding in a 50 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}-dozen individual offers to buy distressed lodge attributes for its Banyan Lodging Improved Benefit Fund (BLEV).

“The pandemic has established a selection of investment chances, ranging from more recent assets advertising at underneath alternative prices to special discounts resulting from house owners facing liquidity crises,” states Andy Chopra, Banyan’s running lover and main expenditure officer.

Banyan has currently shut the 1st $20 million of investments in its BLEV fund, in accordance to an announcement in early December. That’s now far more than midway to the fund’s challenging cap of $35 million, which it is probably to access in early 2022.

WMRE caught up with Chopra to inquire why possibilities to obtain distressed hotel homes have taken so lengthy to occur to industry and what forms of specials are possible in the close to long term.

“It’s a very long process,” he claims. “During the World-wide Financial Crisis, it was not until four or five many years just after the begin of the disaster that lenders commenced to offer troubled assets off of their stability sheets.”

This interview has been edited for design, duration and clarity.

WMRE: Why do you assume that additional alternatives to purchase distressed resort qualities are rising now?

Andy Chopra: There is tiredness on the part of funds invested pre-pandemic. And there is fatigue on the portion of creditors. In accordance to new investigation from Jones Lang LaSalle, foreclosure exercise for lodge homes in September 2021 was four times what it was in June 2020.

Many of these qualities have absent two or even 3 years without having any type of cap ex expenditure, and there is seriously no further liquidity to do that. There is going to be force from brands to start building advancements. Other hotel attributes have financial loans that are coming owing. The homeowners may perhaps not see financial sense in investing more in the assets. They would rather just sell… or hand the keys back again the loan provider.

WMRE: How are you figuring out distressed homes and proprietors ready to market?

Andy Chopra: We are using our present networks, lending associations and of system the brokerage community… We will also get mobile phone calls ahead of an asset is extensively marketed… We have a reputation, mainly because when we put an give out and that supply is recognized, there is a incredibly significant chance that we are likely to be closing.

WMRE: Your BLEV fund will have a tricky cap on its fundraising of $35 million. How will you deploy that cash?

Andy Chopra: Joint venture partnerships with institutional investors and syndicates of retail investors… implying complete investible fairness in the assortment of $350 million. We strategy to get a assortment of hotels—likely a dozen choose-service, extended-stay, life style or compact whole-assistance motels.

WMRE: Will all the lodge attributes bought by BLEV be distressed?

Andy Chopra: We assume about 60 p.c of our investments will be perfectly-positioned resorts that are presently income-movement good. There are sure accommodations homes — many resort accommodations, for case in point — that are previously recovered. BLEV is now beneath contract to get three lodge homes like these. These properties, in terms of a cap charge dependent on a trailing 12-month quantity, we come to feel cozy with 7 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to mid-8 percent… They will supply an rapid return to our investors.

BLEV has also recognized at the very least two dozen distressed resort houses that it is assessing. For about a 50 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} dozen resort homes, BLEV is just one of a couple potential purchasers who have been requested to make their “best and final” presents. Say a assets began with 20 bidders who gave letters of intent. By the “best and final” spherical, it has been narrowed down to two or 3 letters of intent.

The general intention is to get a 2x fairness several, or a 20 per cent inner charge of return for BLEV’s buyers. We will framework the portfolio appropriately.

WMRE: Are you arranging to buy these distressed attributes at a price reduction?

Andy Chopra: We would acquire at a thing in between what the 2019 cap rate was and where by we feel it will be in the up coming 3 several years. It may well appear like a incredibly very low cap fee with the trailing 12-month web working profits (NOI)—we may possibly conclude up obtaining on what appears to be like like a 5 p.c cap price.

WMRE: If you took the rate and deemed that in conditions of a distressed hotel NOI from 2019, what cap rate would you get?

Andy Chopra: I would say everywhere from 7.25 percent to 8.75 percent. There are also a range of disparate variables—particularly cap ex—that can influence valuation. Routine maintenance has been deferred in quite a few of these accommodations. The lodges could also involve upgraded technological know-how.

WMRE: Can you characterize your investors?

Andy Chopra: The buyers in the BLEV fund are primarily superior web truly worth and extremely large internet worthy of individuals and loved ones workplaces.

WMRE: Do you also plan to raise revenue from other private equity funds?

Andy Chopra: For the BLEV fund’s framework, we genuinely will need to be nimble and flexible—that is actually not constant with the company approach of other conventional non-public fairness resources. If we are going just after particular property that are stabilized and then incorporating other property that will give bigger returns with better threat, it is rough to uncover funds that are ok with equally of these places.

WMRE: Why do think that value is possible to return to these resort qualities?

Andy Chopra: We definitely think in the lengthy-expression prospects for vacation. Persons are heading to get on planes to see their purchasers. We also believe that we will be in a constrained provide atmosphere for the following two to a few decades.

We also imagine that the financial state is in enlargement method. Since of that there is a superior chance that we are in an inflationary setting. Motels reset their rents each and every 24 hours—so we come to feel that we are properly-positioned to push produce and investor return if we do experience a extended inflationary ecosystem.

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Sequoia’s stealthy wealth management fund shakes up its portfolio

Sequoia Cash, a single of Silicon Valley’s premier enterprise companies, has quietly built a $14bn fund to invest the prosperity of its associates and start-up founders. Now the fund’s supervisors are offloading some of the large-traveling tech corporations that have designed Sequoia rich.

Sequoia Heritage, started out in 2010 with money from the enterprise firm’s partners, has ploughed the proceeds of the sales into new investments these as air filtration vendors and opioid cure clinics.

The trades, mainly produced in the earlier 12 months-and-a-50 percent, have nudged Heritage more into the highlight after around a ten years in the shadow of Sequoia’s venture funds resources, which built early investments in the likes of Apple, Google, Nvidia, Instagram and WhatsApp.

Heritage dumped its full keeping of extra than 500,000 shares in the travel business Airbnb in the 2nd quarter, and it has bought more than 50 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its stake in the video game growth firm Unity since the enterprise went general public, in accordance to filings. Both equally providers are also massive winners for Sequoia’s venture resources.

At the identical time, Heritage has moved deeper into private investments, this sort of as the industrial holding organization Madison Industries and an unnamed opioid therapy enterprise backed by the personal fairness agency Shore Capital Associates.

Speaking publicly about the fund for the to start with time, Heritage’s head buyers, Keith Johnson, 46, and Kevin Kelly, 31, instructed the Monetary Times it aimed to triple investor cash about a ten years. Johnson mentioned it has crushed that target.

“The following, greatest investment has to be superior than all the things else we currently very own and much better than every little thing else we’re observing,” Kelly explained.

Heritage, which shares a creating with Sequoia Funds and operates as a different legal entity, created returns of extra than 73 for every cent in the 12 months by means of June this year, said a person person briefed on the figures.

Some of the gains have occur from early bets on new fund managers, which includes the former star T Rowe Price inventory picker Henry Ellenbogen’s Strong Funds Companions, in accordance to individuals common with the investments.

But Heritage has progressively profited from direct investments that do not come from external administrators.

Just one instance is Veterinary Emergency Team, a private organization that Heritage to start with backed when it experienced just two clinics in 2017. Traders a short while ago valued the organization at $1.5bn following a $100m financing.

The development of Heritage has developed rewarding returns for Sequoia’s partners and their foundations, the major investors in the fund. It has also designed a massive pool of regular, charge-charging assets that could verify important to the future of Sequoia’s sprawling selection of interrelated firms.

Some of Sequoia’s rivals, including Andreessen Horowitz, have held early discussions about developing comparable funds, according to people today familiar with the conversations. Andreessen has declined to remark on its designs.

Compared with similar prosperity management cash, these as the McKinsey affiliate MIO Companions, Heritage also manages cash for 3rd-occasion buyers — a selection that has permitted it to expand into a profitable standalone business.

Heritage commenced in 2010 with about $250m from outside traders and $150m every single from Sequoia associates Michael Moritz and Doug Leone. Moritz viewed the fund as a vehicle for men and women in “Sequoia and the Sequoia circle” to regulate their money when averting Wall Road prosperity administration companies, he said in an job interview.

Heritage is structured as an open-ended fund, meaning it does not require to return money to traders by a specified date. The fund rates a flat rate for the property it manages and does not include additional costs on efficiency gains, in accordance to folks common with the composition.

The fund has recently submitted a proposal permitting investors to pay out decreased management costs in exchange for an supplemental general performance price, the persons mentioned.

Heritage’s co-heads mentioned they did not intention to allocate assets evenly involving different sectors. As a substitute, they would consider just about every new financial commitment independently, aiming to uncover the best returning belongings.

“The earth has appear to believe assets in 2021 are really worth what we assumed they would have been well worth in 2025 if the corporation executed flawlessly,” Kelly claimed.

Kelly said Heritage experienced seemed to sell hugely valued holdings at “2025 prices” and move the proceeds into locations exactly where the company was “leaning into the wind a little bit”.

Larry Gies, founder of Madison, explained the organization had developed “four-and-a-50 percent fold” since Heritage 1st invested in 2020.

Heritage has invested far more cash as the business has absent on a streak of acquisitions, which includes a $3.6bn acquire of Nortek’s custom air filtration business this 12 months. Madison now built about $7bn in yearly revenues, Gies mentioned.

“It’s not the regular VC advancement trajectory, but it’s truly major income stream generation,” Gies stated.

Heritage’s achievements partly hinges on the tight-knit group of venture capitalists and start out-up founders that make up its investor foundation.

Heritage has invested in some of the greatest winners in Sequoia’s undertaking money, which include Stripe, the on the internet payments enterprise just lately valued at $95bn. John Collison, a co-founder of Stripe, has also invested in Heritage and serves as a director of the firm’s advisory board, in accordance to regulatory filings.

Johnson mentioned the advisory board had “no participation in the day-to-day administration of the organization and no purpose in investment decision decision making”.

Heritage’s other investors have incorporated former Google chief executive Eric Schmidt’s family foundation and massive institutions this kind of as the Oxford university endowment, in accordance to their filings.

“Our occupation is to optimise the returns for the Heritage traders,” Johnson said, “as opposed to seeking to boost returns for Sequoia Funds.”

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Tricor Group Completes Acquisition of NZGT Holding Company Limited, A Leading Corporate Trustee and Fund Supervisor in New Zealand with NZ$250 Billion in Funds under Supervision

HONG KONG & SINGAPORE & AUCKLAND, New Zealand, November 29, 2021–(BUSINESS WIRE)–Tricor Group (Tricor), Asia’s leading business expansion specialist, has received regulatory approval and completed its acquisition of NZGT Holding Company Limited (NZGT Holdings) together with its wholly owned subsidiaries The New Zealand Guardian Trust Company Limited (Guardian Trust) and Covenant Trustee Services Limited (Covenant) from Complectus Limited on November 25, 2021.

Tricor is the largest pure-play corporate services platform in Asia Pacific, serving over 50,000 client entities across its 21-market footprint. A positive move for Guardian Trust and Covenant, this acquisition will see the group and its New Zealand clients benefit from Tricor’s significant financial backing and global best practices.

Guardian Trust and Covenant are the leading providers of corporate supervisory services with over NZ$250 billion in funds under supervision. Guardian Trust has operated in New Zealand for over 125 years. Guardian Trust and Covenant will continue to grow its team and capabilities through further investment by Tricor Group. Day to day operations remain unchanged.

Tricor’s Global Corporate Trust business will operate and serve clients across five global markets including Hong Kong SAR, Beijing, Singapore, the UK and New Zealand.

Lennard Yong, Tricor Group CEO, said: “I am pleased to welcome Guardian Trust and Covenant to Tricor Group. This acquisition broadens our footprint in ANZ and places Tricor in an enhanced position to better serve our clients. The addition of Guardian Trust and Covenant significantly strengthens Tricor’s global corporate trust practice with market-leading and differentiated trust solutions in New Zealand and across Australasia and Asia-Pacific. We are very grateful for the approval to be stewards of these two leading institutions. Our goal is to support the management team led by Harry Koprivcic and to grow these businesses within their respective markets and to add to our regional corporate trust platform in Asia Pacific.”

David Naphtali and Jonathan Hatch, Co-Managing Directors of Madison Pacific, A Tricor Company, leading the integration of Guardian Trust and Covenant into the Tricor Corporate Trust Business Division, said: “We look forward to working with the fantastic team to bolster the corporate trust solutions we can provide our corporate clients across Asia Pacific and the UK.”

Harry Koprivcic, CEO of NZGT Holdings, said: “As a leading corporate trustee in New Zealand, we are starting a new chapter by becoming part of a large global entity. Enhanced by the capabilities of Tricor, we will continue to deliver exceptional corporate solutions to our clients.”

About Tricor Group

Tricor Group (Tricor) is Asia’s leading business expansion specialist, with global knowledge and local expertise in business, corporate, investor, human resources & payroll, corporate trust & debt services, and governance advisory. Tricor provides the building blocks for clients’ business growth, from incorporation to IPO. Tricor has had a rapid expansion through organic growth and development as well as partnerships, mergers and acquisitions. The Group today has ~50,000 clients globally (including ~20,000 clients in Mainland China), a staff strength of over 2,800 and a network of offices in 47 cities across 21 countries / territories. Our client portfolio includes over 2,000 listed companies in Hong Kong SAR, Mainland China, Singapore and Malaysia, and more than 40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Fortune Global 500 companies, as well as a significant share of multinationals and private enterprises operating across international markets.

Visit: www.tricorglobal.com

About Complectus

Complectus was established in 2014 and is the dominant and most innovative fiduciary services group in the New Zealand market.

About Guardian Trust and Covenant

Guardian Trust and Covenant have a market-leading position and are experienced in all aspects of corporate trust work. They are leading providers of corporate trustee services to the New Zealand market. Guardian Trust has been recognized by KangaNews as the leading provider of trustee services by being awarded the New Zealand Trustee of the Year for four years running.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211128005198/en/

Contacts

HONG KONG SAR (GROUP OFFICE)
Sunshine Farzan
Tricor Services Limited
Group Head of Marketing & Communications
Tel: +852 2980 1261
Email: Sunshine.Farzan@hk.tricorglobal.com

NEW ZEALAND
Laura Air
Alexander PR
Group Account Director
Tel: +64 21 259 3242
Email: laura@alexanderpr.co.nz

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Pender Growth Fund Provides Financial Highlights and Company Updates

VANCOUVER, British Columbia, Nov. 26, 2021 (GLOBE NEWSWIRE) — Pender Growth Fund Inc. (the “Company” or “Pender”) today announced its financial and operational results for the three months and nine months ended September 30, 2021.

Financial Highlights (Unaudited)

  • Net income was $75,339,050 for the three months ended September 30, 2021 (September 30, 2020 – $2,730,979) primarily the result of positive investment performance in the quarter.

  • Net income per Share for the three months ended September 30, 2021 was $9.89 (September 30, 2020 – $0.35).

  • Shareholders’ equity per Class C common share (“Share”) was $17.31 as at September 30, 2021 (December 31, 2020 – $6.11).

  • The Company’s total shareholders’ equity was $131.9 million as at September 30, 2021, an increase from December 31, 2020 ($47.3 million) that was primarily the result of positive investment performance during the period.

  • Shares outstanding were 7,616,529, a decrease from December 31, 2020 (7,740,129) that was the result of share repurchases under the Company’s Normal Course Issuer Bid (“NCIB”) which was renewed on February 11, 2021.

  • At September 30, 2021, 85.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the investment portfolio is in private companies and 14.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} is in publicly-listed companies.

PERFORMANCE
(based on Shareholders’ Equity)

3 Month

1 Year

3 Year

5 Year

Since Inception

Class C

47.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

81.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

29.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

15.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

21.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

  • Management Expense Ratio (“MER”) was 4.30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the quarter ended September 30, 2021, up from 2.96{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the same period in the prior period, primarily due to the increase in management fees as a result of the increase in total Net Assets, plus, additional financing expenses.

Portfolio Highlights

We believe that the Company is particularly well-positioned today to pursue its investment objectives in the context of current market volatility and valuations in micro and small cap stocks in North America.

During the period we continued to be active in public markets where we saw what we believed to be strong opportunities both in longer-term compounders and potentially shorter-term close the discount situations. With the continued strength in small cap markets, we have been decreasing some positions and continue to work on new opportunities to deploy capital at attractive rates of return.

As always, this quarter we worked closely with our private portfolio companies and certain of our public portfolio companies. We are pleased to see private technology companies from within our portfolio flourish and build value, including having the opportunity to go public.

In particular, Copperleaf Technologies Inc., a portfolio company we own both directly and indirectly through our investment in Pender Private Investments Inc., listed on the TSX at $15.00 per share under the symbol “CPLF” in early October.

At September 30, 2021, the Company held approximately 97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} or 16.7 million Legacy Shares of Pender Private Investments Inc. (“PPI”), formerly the Working Opportunity Fund (EVCC) Ltd. (“WOF”). These shares were acquired from shareholders of WOF (“Exiting Shareholders”) under the previously announced transaction (the “WOF” Transaction”). The scheduled second payment for the remaining 50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the proceeds from the sale of their shares has been issued to former WOF shareholders.

Under the Legacy Shares rights, PPI is required to redeem them, on a pro rata basis at NAV, upon PPI‘s receipt of cash proceeds for the sale of any of its portfolio investments. PPI recently received cash proceeds for its divestment of Redlen Technologies Inc. and Teradici Corporation, and redeemed approximately 58.49{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of Legacy Shares on a pro rata basis. In October, the Company received a total of $63,197,947 on redemption of 9.8 million of the Legacy Shares it held. This redemption triggered a requirement for the Company to pay an additional cash payment of $21,136,513, or $1.2661 per share, to the Exiting Shareholders and the Company made the payment effective October 13, 2021.

Other Highlights

On February 11, 2021, the Company launched a new NCIB, under which the Company may purchase a maximum of 700,866 shares, or 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s public float on launch date, in the year ending February 11, 2022. During the period we continued to acquire shares of the Company in the market under our NCIB because we believe the shares are trading at a discount to their intrinsic value.

We encourage you to refer to the Company’s MD&A and quarterly unaudited financial statements for the September 30, 2021 and the annual audited financial statements for the year-ended December 31, 2020 as well as other disclosures available under the Company’s profile at www.sedar.com for additional information.

Recent Developments

Redlen Technologies Inc, (“Redlen”)

On September 9, 2021, Redlen, one of PPI’s key long-term private investees, reached an agreement with Canon Inc. (“Canon”) to conclude a share transfer agreement, with the goal of enabling Canon to accelerate the development of Photon Counting CT systems and continue to contribute to the advancement of diagnostic imaging. The acquisition was completed on September 28, 2021, resulting in PPI’s divestment of Redlen, as Redlen became a wholly owned subsidiary of Canon.

Teradici Corporation (“Teradici”)

During the quarter, Teradici, one of PPI’s key long-term private investees, entered into a definitive agreement to be acquired by HP Inc. (“HP”) with the goal of enhancing HP’s capabilities in the Personal Systems category by delivering new computer models and software-enabled digital services tailored for hybrid work. The acquisition was completed on October 1, 2021, resulting in PPI’s divestment of this holding.

Copperleaf Technologies Inc. (“Copperleaf”)

As at September 30, 2021, the Company held 12.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of Copperleaf’s issued and outstanding shares, both directly and through its investment in PPI. On October 7, 2021, Copperleaf’s common shares began trading on the TSX under the symbol “CPLF”. The company raised $161.1 million at $15.00 per common share.

About the Company
The Company’s objective is to achieve long-term capital appreciation for its investors. The Company utilizes its small capital base and long-term horizon to invest in unique situations, primarily small cap, special situations, and illiquid public and private companies. The Company trades on the TSX Venture Exchange under the symbol “PTF”. The Company posts its Reporting Nav on its website, generally within five business days of each month end.

Please visit www.pendergrowthfund.com.

For further information, please contact:

Tony Rautava
PenderFund Capital Management Ltd.
(604) 653-9625
Toll Free: (866) 377-4743

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the Company and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “project”, “expect”, “intend”, “plan”, “will”, “may”, “estimate” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections and include, without limitation, statements regarding the benefits of the WOF Transaction, the Company’s belief that its shares trade at a discount to their intrinsic value, investment and liquidation opportunities in the public markets, and future investment opportunities. The forward-looking statements in this news release are based on certain assumptions; they are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the risk that valuations of micro and small cap public companies will change, the general volatility of public markets as well as factors discussed under the heading “Risk Factors” in the Company’s annual information form and MD&A available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.