TheThe Solidarity Fund QFL: Solidarity Fund QFL: an Exportable Model!an Exportable Model!

Yvon BolducYvon BolducCEO CEO

A Bit of GeographyA Bit of Geography

A leader in SME development A leader in SME development capital, founded in 1983capital, founded in 1983

A labour-sponsored investment fund created by the QFL to promote jobs in Québec by investing in small and mid-sized businesses

ContributionsContributionsUS$630 million per year on US$630 million per year on

average over the last 5 yearsaverage over the last 5 years

ContributionsContributionsUS$630 million per year on US$630 million per year on

average over the last 5 yearsaverage over the last 5 years

Solidarity Fund QFLSolidarity Fund QFLNet assets of Net assets of US$5.6 billionUS$5.6 billion

Solidarity Fund QFLSolidarity Fund QFLNet assets of Net assets of US$5.6 billionUS$5.6 billion

InvestmentsInvestmentsUS$2.7 billion, 2,139 partner US$2.7 billion, 2,139 partner companies and 105,596 jobs companies and 105,596 jobs

InvestmentsInvestmentsUS$2.7 billion, 2,139 partner US$2.7 billion, 2,139 partner companies and 105,596 jobs companies and 105,596 jobs

ShareholdersShareholdersClose to 570,000Close to 570,000ShareholdersShareholdersClose to 570,000Close to 570,000

As at November 30, 2005

SecuritiesSecuritiesUS$2.9 billionUS$2.9 billionSecuritiesSecurities

US$2.9 billionUS$2.9 billion

Figures that speak for Figures that speak for tthemselveshemselves……

Technology firms: 26%

Industries and services: 74%

As at May 31, 2005 (fair value)

A diversified portfolioA diversified portfolio

Turnaround/consolidation: 36%

Start-up: 20%

Mergers/acquisitions: 11%

Expansion: 33%

Market Market ssharehare

Invested Capital

Labour Fund (Funds, Fondaction)

Institutions (CDP, Investissement Desjardins)

Government (BDC, Innovatech, SGF)

Corporations / Private / Other

Foreign

$1,534 M $1,003 M $739 M $621 M $635 M $709 M

Source: Mary McDonald

2000 2001 2002 2003 2004 2005

10 %

20 %

30 %

40 %

Québec SMEs that are able to become Québec SMEs that are able to become leaders in their industries and/or able to leaders in their industries and/or able to grow from SMEs into large companies. grow from SMEs into large companies.

Our investment criteria:

Québec SMEs that are able to become Québec SMEs that are able to become leaders in their industries and/or able to leaders in their industries and/or able to grow from SMEs into large companies. grow from SMEs into large companies.

Our investment criteria:

Our objectiveOur objective

Socio-economic criteria

Financial criteria

Products and markets

Management

Patient capitalPatient capital– The Fund establishes long-term partnershipsThe Fund establishes long-term partnerships

Value-added servicesValue-added services– Help create or improve the company’s board of Help create or improve the company’s board of

directorsdirectors

– Identify acquisition targetsIdentify acquisition targets

– Provide economic trainingProvide economic training

Flexible financial productsFlexible financial products– Productivity loanProductivity loan

– Trademark loanTrademark loan

SME succession fundSME succession fund

Patient capitalPatient capital– The Fund establishes long-term partnershipsThe Fund establishes long-term partnerships

Value-added servicesValue-added services– Help create or improve the company’s board of Help create or improve the company’s board of

directorsdirectors

– Identify acquisition targetsIdentify acquisition targets

– Provide economic trainingProvide economic training

Flexible financial productsFlexible financial products– Productivity loanProductivity loan

– Trademark loanTrademark loan

SME succession fundSME succession fund

OurOur goal: to create more wealth goal: to create more wealth for our partners and shareholdersfor our partners and shareholders

ConclusionConclusion