Manager's Commentary
Portfolio Performance
Pender Growth Fund VCC Inc. has had an active start to 2011. The most significant event was the acquisition of portfolio company Cytiva Software by Taleo Inc. for $0.42 per share. The Fund held preferred shares and warrants of Cytiva and received $1,460,000 from the disposition of its original investment of $750,000.
This transaction was the primary driver as the Fund’s value at April 30, 2011; increased to $18.5 million from $17.1 million at December 31, 2010. This translated into a NAV increase per share of the common shares to $0.98 from $0.57 as at December 31, 2010.
Redemption Update
The Fund received redemption requests for eligible R shares totaling $1.3 million for the redemption period ending November 30, 2010. As a result of the Fund’s successful exit from Cytiva Software, the Fund will be redeeming these shares by June 15, 2011. We would like to remind Class R Shareholders that the annual redemption due date is November 30 of each calendar year, so please submit any eligible redemption requests prior to that date.
Portfolio Updates
In February, the Fund added a new position, by investing $500,000 in common shares of Webtech Wireless at $0.40 per share. We have been following Webtech for several years. The company was looking to bolster its working capital, and we were able to participate in a recent private placement. Webtech is a BC company that offers telematics solutions to governments, transit and commercial fleets around the world. The company increased their 2009 revenue by 52% to $41 million in 2010.
Similarly, the Fund was able to invest in another company we have been following for several years, Vendtek Systems. The Fund invested $250,000 at $0.60 per share with a half warrant at $0.75. Vendtek provides software for the global prepaid and financial services markets. The company raised capital as it aggressively pursues the Brazilian prepaid cellular market.
The Fund added to its position in BasicGov, investing an additional $250,000 as the company aggressively pursues a major strategic partner.
Outlook
We are seeing increased interest and activity in the technology sector so far this year. This is a positive sign for companies looking for financing or pursuing a mergers and acquisitions strategy. As a result, we believe this may be a busy year for the Fund’s portfolio companies.
David Barr
May 13, 2011