Press release

Montréal, July 4, 2011 (5:00 p.m.) -  Unveiling the results for the year ended May 31, 2011, the Fonds de solidarité FTQ (“Fonds”) is pleased to announce an annual return of 8.8%. As a result of this performance, share price reached a new high of $25.92, an increase of $2.08 over its value in July 2010 and $0.89 over January 2011. Net earnings were a record $650 million, allowing net assets to break the $8 billion mark for the first time since the Fonds’ inception 28 years ago. The number of owner-shareholders also set a new record at 583,235.

“We’re extremely satisfied with our performance in fiscal 2011. We collected almost $40 million more in shareholder contributions than last year, issuing $698 million in shares.  These figures show that a growing number of Quebecers are realizing that the Fonds’ RRSP is a great product that makes it easy to get into good saving habits and ultimately enjoy a more comfortable retirement. One of the main reasons our RRSP campaign was so successful is the tireless work of our teams, including, of course, our 2,000 local representatives, and I’d like to thank them all for their engagement and effectiveness. The Fonds is a unique, innovative tool, both on the social and economic levels in that it uses its shareholders’ savings to invest in businesses all across Québec , allowing them to grow and create and protect jobs,” said Michel Arsenault, Board Chairman of the Fonds de solidarité FTQ and President of the FTQ.

 “With a return of 5.0%, the first six months of fiscal 2011 were especially profitable.  For the second half of the year, in which the stock markets were more volatile, we generated a 3.6% return. The Fonds’ financial assets are mainly allocated between two portfolios: a mission driven development capital investments portfolio that invests in companies impacting the Québec economy and that returned 8.9%, and a marketable securities portfolio, which generated 12.3% for the year. Our operating expense ratio came in at 1.5%, a figure that compares favourably with the top organizations and funds in our industry,” added Fonds President and CEO Yvon Bolduc.

An RRSP that pays off

Québec workers have been placing their trust in the Fonds for nearly 30 years. And for good reason, because its savings solution allows them to set money aside for retirement and other important life projects while obtaining a reasonable return. Although most shareholders use the money accumulated in their Fonds RRSP to better their retirement, many younger workers use the funds to purchase their first home, start a business or go back to school. The advantages of investing in the Fonds are especially significant over time when you factor in the effect of the 30% in tax credits. For example, shareholders who invested the same amount each year through payroll deduction earned an annual compound return of 13.1% over 7 years and 9.5% over 10 years.[1]

$733 million in investments to drive the Québec economy 

“Over the last fiscal year, our investment teams kept up a good pace, committing $733 million. Factoring in businesses backed by the regional funds, a total of 161 companies benefitted from investments, including 88 new companies that partnered with the Fonds network for their growth or modernization projects. Together with its network, the Fonds now has 2,129 partner companies, thereby helping to create, maintain and preserve nearly  161,000 jobs in Québec.  I would also like to acknowledge our regional and local fund networks, which have been around for 15 and 20 years respectively, providing SMEs across Québec with their extensive knowledge of the regional economy and serving the needs of businesses of all sizes,” concluded Mr. Bolduc.

Top investments in 2010-2011

With $250 million invested in the last five years, the Fonds continued its support of the wood and forestry industries, concluding several transactions during the year, notably, $5 million in Les Chantiers Chibougamau to finance a new plant, $2 million in Groupe Crête, division Saint-Faustin, to reopen the Scierie Forget sawmill, and $10 million in Scierie Dion & Fils, which will be used to enlarge its plant and purchase equipment. 

The Fonds also stood behind the cultural industry, pledging $40 million to set up the Fonds Capital Culture Québec. The Fonds d’investissement de la culture et des communications s.e.c. secured $6.7 million from the Fonds, while Serdy Média obtained $4 million for a new specialty channel (Zeste).

The venture capital industry also benefited from the Fonds’ support, with $33 million invested in three seed funds: Fonds d’investissement Réal, for the IT sector, AmorChem, dedicated to life sciences, and Fonds d’amorçage Cycle-C3E, which invests in green technology. In life sciences, the Fonds’ investments include $4.1 million in Medicago, a developer of plant-based vaccines, and an additional $5 million in Enobia Pharma for its research on therapies for bone disorders.

Doing its part to facilitate business succession

The Fonds de solidarité FTQ and its regional funds have been active on the business succession front for over a decade. The organization has assisted 100 or so Québec companies with this process, investing upwards of $175 million in this regard. In the last year, the Fonds allocated $10 million to the new Fonds Relève Québec, announced in the provincial government’s last budget, and has been actively involved in Opération Relève Québec 2011, an information campaign conducted across the province. Workshops have already been held in seven cities, and six more will be visited in the fall.

Financial Highlights

- 30 -

 Source:                Josée Lagacé

Senior Advisor, Press Relations and Communications

Fonds de solidarité FTQ
Telephone:        514 850-4835

Cellular:               514 707-5180 

E-mail: jlagace@fondsftq.com