The Crocus Fund promotes employee financial participation and ownership in investee firms in several ways. For example, it will leverage worker buyouts — in some cases — using a debt instrument. Under this scenario, the fund may purchase shares from a company or retiring owner and sell them to a worker trust in exchange for a security interest (in the company). In turn, the employer would commit to make trust contributions to a level equivalent to the Crocus Fund’s stake, over time.
In other investee firms, the fund may require the establishment of share purchase plans similar to those of Working Opportunity.
The Crocus Fund is currently developing a training program for workers (and some managers) in investee firms comparable to that delivered by the Fonds de solidarité.
Fund officers are presently developing investment support services. This includes organizing annual roundtables of the chief executive officers and financial managers of investee firms (and other Manitoba enterprises). Roundtables will give these firms access to technical advice on high performance production methods, among other things.
The Crocus Fund's first investment was delayed owing to lengthy struggles to ensure institutional self-sufficiency with respect to its capital base. However, in December, 1994, it invested $720,000 in the mature software retailer Inforcorp Computer Solutions of Winnipeg.
Since that time, the fund has embarked on a more intensive investment schedule. As of November, 1995, approximately $9 million was placed in seven investment projects, greatly exceeding projected portfolio levels for the year`s end. Two of these transactions concentrated on leveraging worker ownership, including the landmark $2.5 million investment in Buhler Industries, an agricultural implements manufacturer, which has yielded its 475 employees minority voting shares in the company.
The majority of investee firms are situated in the manufacturing sector and operate with a strong emphasis on export markets.
Of course, further understanding of the investment activity of the Crocus Fund must await further portfolio development in 1995 and thereafter. Nonetheless, it is worth mentioning that the fund has already altered the face of the Manitoba venture capital sub-market in its establishment of a large and stable pool of equity capital. This is in evidence in recent data provided by Macdonald and Associates and the ACVCC (1993 and 1994), as analyzed by the CLMPC.
While the investment portfolio of the Crocus Fund is in its early stages, some relevant economic data is already available. For instance, fund officers calculate the employment universe of current investee companies to be close to 1,100. 200 jobs are expected to be created from this group in 1996.