Kevin Sorenson Chair NOVEMBER 2016 42nd PARLIAMENT, 1st SESSION Published under the authority of the Speaker of the House of Commons SPEAKER’S PERMISSION Reproduction of the proceedings of the House of Commons and its Committees, in whole or in part and in any medium, is hereby permitted provided that the reproduction is accurate and is not presented as official. [...] With respect to management fees, the OAG also noted that they “could amount to approximately $250 million of the total amount [$1.35 billion]24 committed to [funds-of- funds] over the expected 13-year lifetime of [VCAP].”25 The OAG made no recommendations in this area of the examination.26 When asked what percentage of the total capital committed will the management fees represent over the life of [...] Botham told the Committee that the selection processes “were designed to allow the government to leverage the knowledge, expertise, and capital of private- sector partners:” A private sector expert panel was named to lead a competitive selection process for the general partners to manage the [funds-of-funds], and for the general partners of the high- performing funds. [...] The government also selected a candidate that did not initially submit an expression of interest.”33 The OAG also “found that the weighting of the criteria changed during the review, affecting the ranking of applicants.”34 The OAG believes that “these practices fell short of a sound process and were not in accordance with the government’s values of fairness, openness, and transparency.”35 Mr. [...] The OAG recommended that when making investments that are similar to those of [VCAP], the Department of Finance Canada and ISED “should fully respect the values of fairness, openness, and transparency while meeting the purposes of the investment.”38 The OAG believes that this would help “maintain the venture capital industry’s confidence in selection processes run by the Government of Canada.”39 I
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