A venture capital fund launched one year ago by the Manitoba government to help grow new businesses is also now expanding.

Premier Heather Stefanson announced Wednesday her government is following through on a promise made in last week's budget to add $50 million to the Manitoba First Fund "to help Manitoba businesses access capital at all stages."

"This investment will spur the creation and growth of a new generation of entrepreneurial-led businesses and drive provincewide growth," she said during a news conference at the Sterling Lyon Business Park in southwest Winnipeg.

An initial $50 million for the venture capital fund was announced in the 2022 budget. A steering committee was created shortly after to pursue partnerships with private capital to boost the investment funds.

That has now generated more than $100 million worth of private-sector interest "and we are using that momentum … to support early-stage businesses so that they can hire, invest and grow in Manitoba," Stefanson said Wednesday.

"Manitoba's business leaders are the engine of our economy, the creators of jobs and prosperity for so many," she said, and they have indicated access to capital is critical for their development and expansion.

Manitoba had been without a provincial venture capital fund for years, after the government-sponsored Crocus Investment Fund — designed to raise capital to support Manitoba companies — stopped trading in 2004, after nearly 12 years of activity, over serious concerns about share valuation practices.

About 34,000 shareholders invested more than $150 million in the fund before Crocus stopped trading. Investigations by the auditor general and RCMP followed, eventually leading to a successful class-action lawsuit against the province.

The new Manitoba First Fund is run independently of the government by a five-member board of directors. They invest money from the fund and private capital with other fund managers to increase the return and build the pool for companies to access, Stefanson said.

"One of the key pillars of this year's provincial budget is opportunities ahead," said Economic Development, Investment and Trade Minister Jeff Wharton, calling the fund "a catalyst to create a much larger venture and growth capital ecosystem for Manitoba businesses."

The first fund manager to receive capital under the Manitoba First Fund is Westcap Mgt. Ltd., which is actually based in Saskatoon.

Westcap, which manages assets of approximately $1 billion, intends to establish offices in Manitoba to manage its new Connect Manitoba Growth fund, the province said in a release. That fund is being seeded with $25 million from the Manitoba First Fund.

"The response from the market has exceeded our most optimistic projections. We are just getting started," Manitoba First Fund chair Mike Pyle said in the news release, adding discussion "are underway with several other funds looking at establishing a presence in Manitoba."

Westcap president and CEO Grant Kook said the seed money is expected to turn into a $60-$80 million growth fund that will invest solely in Manitoba companies.

According to Canadian Venture Capital Association reports, $7.2 billion of private equity was invested across Canada through the first three quarters of 2022, Kook said, noting that Manitoba companies received less than 0.3 per cent of that.

"The Connect Manitoba Growth fund is here to change that statistic," he said.