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Minister Line Beauchamp Announces the First Investment by FIER Partners

$60 Million of Venture Capital for Information Technology Company Start-ups

Montréal, February 27, 2006 - The Minister of Culture and Communications and Minister responsible for Greater Montréal, Line Beauchamp, has announced, on behalf of the Minister of Economic Development, Innovation and Exports, Claude Béchard, the first investment by FIER Partners, to be used to support the creation of a $60 million information technology sector-based fund. “The investment of $10 million in the new Fonds Propulsion III fund has enabled $60 million to be raised, the vast majority from private investors, which is largely in excess of the commitment by FIER Parners to invest one dollar for every two dollars invested by the private sector. It will thus be a significant source of financing for companies to support the development of one of our most dynamic economic sectors, which already has many world leaders in the wireless telecommunications, software and multimedia sector,” Mr. Béchard said.

The Fonds Propulsion III fund, set up by Telesystem Ltd., will make venture capital available to information technology companies in the start-up phase, chiefly in the software and Internet solutions sectors.

“Greater Montréal is an essential engine of Québec’s economic development. A centre of excellence in so many sectors, including aerospace, biopharmaceuticals, fashion and telecommunications, Montréal offers formidable potential for wealth creation,” Ms. Beauchamp stated.

The information and telecommunications technology sector is part of the advantages identified in the government’s economic development strategy, The Québec Advantage, on which Québec depends to bolster its prosperity and position itself on the global scene for years to come.

“The involvement of FIER Partners helped us set up the Fonds Propulsion III fund, which seeks to support information technology companies that are starting up or in their first round of financing,” the fund’s spokesperson, Benoît Hogue, mentioned.

In addition to the $10 million invested by FIER Partners, the other $50 million of the new Fonds Propulsion III fund was provided by private investors, namely Telesystem, the National Bank and the Caisse de dépôt et de placement. “Other private partners may also join the fund, which could reach $100 million,” Ms. Beauchamp indicated.

“FIER Partners is pleased to contribute to the constitution of sector-based venture capital funds offering new sources of financing to business start-ups,” Chief Executive Officer of FIER-Partenaires, Sylvie Pinsonnault, said, adding that negotiations for the constitution of many other sector-based funds are progressing well.

FIER Partners is one of three components of the Regional Economic Intervention Fund (FIER). It consists of a limited partnership whose initial capitalization of $180 million is provided by a subsidiary of Investissement Québec, IQ FIER, for $90 million, and by three tax-advantaged funds: the Fonds de solidarité FTQ ($50 million), Capital régional et coopératif Desjardins ($25 million) and Fondaction, the Fonds de développement de la CSN pour la coopération et l'emploi ($15 million).

The FIER Partners limited partnership has $80 million to support the creation of sector-based development funds that will make equity or quasi-equity investments in business start-ups. The limited partnership contributes one dollar for every two dollars from private investors, so that the total capitalization of the sector-based funds could eventually reach $240 million. FIER Partners also has an enveloped of $100 million to support developmental projects, chiefly in the regions.

“By making use of effective levers like FIER Partners, the government intends to support industrial sectors where Québec has advantages to support its competitive position. And with the expertise and vitality of our business people, we have all the ingredients to enable new companies of the knowledge-based economy to flourish, develop international markets and contribute to Québec’s economic prosperity,” Mr. Béchard said.

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Information :
Josée Béland
Spokesperson, FIER Partners
514 873-6027