A778.01 IS AR inside fp - Crown Investments Corporation

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“It’s important in the agri-food sector for investment fundslike Foragen to have a group of professional investorssupporting them. Investment Saskatchewan’s interest incontributing to investment capital pools translates directlyinto regional success, as evidenced by our currentinvestment in MCN Bioproducts in Saskatoon.”Murray F McLaughlin PhD, P Ag, President and CEO, Foragen Technologies Management Inc.Above: Murray Mucha, Investment Saskatchewan (back), David Maenz, MCN BioProducts Inc. (left),Murray McLaughlin, Foragen Technologies Management Inc. (right).Foragen Technologies Limited Partnership was created to help commercialize early-stage, advanced agriculturaltechnologies from Canadian sources. The management firm believes that innovation and science need to move outof laboratories, and through investment, help support the creation of new companies. The firm achieves this bysupplying seed capital, business and technology management expertise, and networking opportunities to itsportfolio companies. Foragen investments are highly diversified in terms of market sector, stage of developmentand anticipated time to liquidity. Investment Saskatchewan's participation in the fund helps address the gapthat exists for availability of capital for early stage agricultural technology companies in Saskatchewan. Foragenhas offices in Guelph, Ontario; Montreal, Quebec; and at Innovation Place in Saskatoon, Saskatchewan.
A S S E T S – P O R T F O L I OFundamental ValueInvestment Saskatchewan has invested in and currently manages a number of jointventures, partnerships, equity investments, fund investments, and direct loans witha book value of over $458 million at December 31, 2004. These investments have beenmade in companies that generated $274.0 million in consolidated revenues for InvestmentSaskatchewan in 2004 and net income of $19.3 million.Investments are spread through a variety of Saskatchewaneconomic sectors including forestry, fertilizer,manufacturing, processing, agri-business, insurance andfinancial, bio-technology, and advanced and informationtechnology.Investment Saskatchewan's complete portfolio canbe further segmented into direct investments, fund-offunds,small portfolios now managed by third parties,and properties (see page 14).DIRECT INVESTMENTSSince 1999, Investment Saskatchewan (formerly CICIII) directly invested or committed to eight projects totaling$93.4 million. These investments levered $284.4 million ofprivate sector capital in Saskatchewan. Direct investmentsconsist of equity and debt. The six largest direct investmentsaccount for approximately 83 per cent of the totalbook value of Investment Saskatchewan’s portfolio.The asset book value does not necessarily represent themarket value. There are significant constraints on liquidityfor many of the portfolio investmentsthat are managed under variousterms and related shareholder andpartnership agreements.FUND-OF-FUNDINVESTMENTSCurrently Investment Saskatchewanhas $51.6 million in commitmentsto four venture capital fundsin Canada. Investment SaskatchewanAg andAg Related8%Fertilizer29%Manufacturingand Processing7%participates in four funds ranging in size from $10 to $60million. Total commitments by Investment Saskatchewanhave been matched with $148.4 million in private sectorcommitments.The bulk of the funds have investment conditions toensure that every effort is made to direct InvestmentSaskatchewan’s capital to businesses in the province.SMALL PORTFOLIOSThe management of investments individually less than$3 million in size was outsourced to two Saskatchewanbased,private sector investment fund managers in 2003.They are reported as part of PCF Investments Ltd. andWTC Investments Ltd.Investment Saskatchewan’s decision to outsource these71 investments valued at $22.9 million at time of outsourcing,was a strategic decision to provide the province’sprivate sector managers with additional investments,thereby strengthening the province’s capacity to manageventure capital.Adv. Tech,Biotechand Pharma3%Other(Tourism/Culture,Mining,Real Estate)7%Financial/Insurance19%Forestryand Related27%PROPERTIES, CAPITALASSETS AND LEASESIn addition to the above definedportfolios, Investment Saskatchewanmanages a number of propertiesinherited from other Crown corporationsand departments. Theseholdings are varied and include propertiesheld for sale, and a smallportfolio of lease options.13
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