NMAC BETWEEN COMMUTER AND SMA. OPERATIONAL ERROR.

Narrative

WE WERE DEPARTING WRY 35L. LIGHT ACFT TFC USING RWY 26. TWR SAID: 'X; TFC DEPARTING RWY 35L. FLY RWY HDG.' WE RESPONDED: 'TFC IN SIGHT; CLRED TO GO 35L X.' SMA Y WAS JUST TURNING WHAT APPEARED TO BE LEFT XWIND. WE ADVANCED PWR AND DEPARTED RWY 35L. AS WE CLBED THROUGH APPROX 600-900' AGL; I LOOKED OUT AND SAW SMA Y BIG AS DAY IN THE WINDSHIELD. IT WAS APPROX 150' VERT; 0' HORIZ. I PUSHED THE AIRPLANE OVER/DOWN HARD. WE MISSED. I ASKED THE TWR 'WERE YOU AWARE OF THE SMA ACFT ON DOWNWIND?' HE REPLIED; 'YOU SAID YOU HAD IT IN SIGHT.' WE THEN SWITCHED OVER TO DEP. THERE WAS NEVER ANY MENTION THAT WE MUST MAINTAIN SEP. NORMALLY 'IN SIGHT' REQUIRES US TO MAINTAIN SEP; BUT THE CTLR USUALLY WILL SAY SOMETHING TO THE EFFECT 'CLRED TO CLB; MAINTAIN VISUAL SEP...' GRAND FORKS TWR IS AWARE OF THE UNUSUALLY HIGH PERFORMANCE OUR TYPE ACFT HAS COMPARED TO THEIR USUAL TFC. OUR INITIAL RATE OF CLB CAN EASILY EXCEED 2000 FPM. KNOWING THIS; I FEEL THAT GRAND FORKS TWR MADE A MISTAKE BY ALLOWING US TO DEPART INTO THE TFC PATTERN AND EXPECT US TO MAINTAIN A VISUAL WHILE TRYING TO SAFELY CONDUCT OUR DEP. I UNDERSTAND THIS IS A NORMAL OPERATION FOR GRAND FORKS TWR. I'VE NEVER SEEN THIS DONE WHEN MLG ACR DEPART GFK THOUGH. I WILL NO LONGER CALL AN ACFT IN THE PATTERN IN SIGHT AGAIN.