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Poor returns, tax jitters hurt sales of labour capital funds
Posted in Financing
"Labour sponsored venture capital funds are losing traction.
Sales of these investments, which do not include redemptions, plunged 58 per cent to $164-million in the first quarter from $396-million last year, according to figures from Thomson Reuters.
Market jitters, disappointing long-term fund performance and uncertainty created by Ontario's plan to reduce and yank its tax credit by the 2012 tax year sent sales tumbling in the key RRSP-selling season.
'When you take away the tax credits, you are really going to limit the ability of the funds to raise money,' said Dan Hallett, an independent fund analyst. 'It just becomes tougher for them to operate. They are going to need to get bigger to survive ...' "
Read the full article by Shirley Won in the Globe & Mail, published May 16, 2008.