Nicholas Colloff, Oxfam — The SME Impact Investing Fund

Transcript

1.       SEIIF   The  Small  Enterprise  Impact  Inves4ng  Fund   1  
2.       An  ini&a&ve  founded  and  promoted  by     the  City  of  London  Corpora&on,  Oxfam  and  Symbio&cs  
3. The vision of SEIIF is to advance small enterprise financing in developing countries, in a manner consistent with Oxfam’s poverty reduction mission
4. The  Small  Enterprise  Impact  Inves4ng  Fund  (SEIIF)   Unique  Value  Proposi4on   Invest  to  enable  poverty  reduc2on  while  delivering  a   financial  return     1.  Invest  in  job  crea&on   2.  Invest  in  women’s  opportuni&es  and  empowerment   3.  Invest  in  access  to  food  and  sustainable  agriculture   4  
5. Fund  Strategy     5  
6. Key  sta4s4cs   §  Over  80%  of  the  world  popula4on  live  on  less  than  USD  10  a  day  mostly   concentrated  in  emerging  and  developing  countries     §  Over  70%  of  world  GDP  growth  will  come  from  emerging  and  developing   markets   §  Micro,   small   and   medium   enterprises   are   over   95%   of   private   sector   companies,  which  employ  over  50%  of  the  global  working  popula&on   §  Two  thirds  of  the  40  million  formal  SMEs  worldwide  are  in  emerging  and   developing  countries   §  The   credit   gap   for   formal   SMEs   in   emerging   and   developing   markets   is   es&mated  at  USD  0.7  –  0.85  trillion  annually    (IFC  2010)   6   Large  Unmet  Demand  for  Access  to  Capital  
7. Investment  Opportunity     SEIIF  is  an  opportunity  for  investors  to  benefit  from  high  growth  investment   opportuni&es  while  enabling  social  and  financial  inclusion  in  low  and  medium   income  economies   § By    targe&ng  more  distribu&ve  economic  growth,  you  help  low-­‐income   households  move  out  of  poverty   § By  inves&ng  in  access  to  food,  job  crea&on  and  women’s  empowerment,  you   contribute  both  to  economic  development  and  to  poverty  reduc&on  at  the  base   of  the  pyramid   7   Access  to  Capital  as  Catalyst  of  Poverty  Reduc4on  
8. 8   Target  Investments   Objec&ve  of  the  fund  is  to  enable  financing    for  small  enterprises  (from  10  to  100   employees)  with  an  emphasis  on  food  produc4on  and  distribu4on  and  access  to   formal  jobs  for  women       Innova4ve  and  dynamic  financing  intermediaries   The  Fund  invests  through  local  financing    intermediaries   such  as  :     §   Downscaling  banks   §   Up-­‐scaling  microfinance  ins&tu&ons   §   Leasing  companies   §   Credit  co-­‐opera&ves   §   Specialized  funds   §   NGOs  
9. Target  Markets  -­‐  low  and  middle  income  economies     GDP  Growth  Rates  (%)                 Fund  Geographical  alloca&on:   §    Up  to  60%  in  Sub-­‐Saharan  Africa   §   Up  to  40%  in  South  and  South-­‐East  Asia   §   Up  to  20%  in  other  regions   9   Stronger  Growth  in  Lower  Income  Economies  
10. Investment  Instruments       Small  Enterprises  needs  include  a  large  range  of  products,  thus  the  Fund   provide  a  wide  range  of  instruments  serving  the  diverse  financing   needs  of  intermediaries,  including:   §  Short  to  mid-­‐term  senior  loans   §  Promissory  notes  and  bond  obliga&ons   §  Long  term  and  subordinated  debt   §  Leaers  of  credit  and  guarantees   §  Preferred  shares   §  Share  capital   10  
11. Performance  Targets     11   How  do  we  get  there?  
12. Investment  Strategy       Investment  Horizon             Investment  Terms  &  Liquidity   §  Quarterly  NAV,  90  days  redemp&on  no&ce   §  Maximum  10%  exits  per  NAV  date   §  Minimum  10%  cash  &  short  term   §  Credit  line  of  up  to  20%       12  
13. Impact  Measurement   We  measure  job  crea&on  and  enterprise  growth   Growth  indicators:   § Growth  of  output   § Growth  of  revenues   § Growth  of  financing     Job  crea4on  indicators  :    Employment  and  wages:   § By  gender:  women/men   § By  quality:  part/full  &me   § By  loca&on:  rural/urban     13  
14. SEIIF’s  First  Investment   14  
15. XAC  LEASING  -­‐  MONGOLIA   §  Employs  20  people  and  serves  260  clients   §  Commercial  banks  collateral  requirements  make   it  difficult  for  small  businesses  to  finance  assets   purchase   §  Xac  Leasing  is  building  a  professional  and  mul&-­‐ sectorial  approach  of  leasing            SEIIF’s  first  investment:    a  USD  1M  loan  with  a  tenor  of  36  months   “We  are  happy  to  count  on  SEIIF  as  one  of  our  lenders  to  support  our  opera6ons.  We  are  also   proud  to  further  enhance  our  impact  repor6ng  commitment  and  thus  to  be<er  measure  our   contribu6on  to  the  growth  of  our  na6onal  economy  through  the  funding  of  SMEs.”       CEO  of  Xac  Leasing    
16. Target  Investments   16  
17.   SPECIALISED  LOCAL  FUND  -­‐  WEST  AFRICA   §  Investment  along  the  agricultural  value  chain  with  goal  of  revitalizing  distressed  regions  in   West  Africa     ü  Invest  in  SMEs  that  intend  to  become  large-­‐scale  efficient  producers  with  debt,  equity   or  quasi-­‐equity   ü  Supply  and  affordability  of  improved  seeds  for  smallholder  farmers   ü  Value  crea&on  opportuni&es  along  agricultural  value  chain   ü  Local  processing  of  crops  that  displays  structural  cost  advantages   ü  Supply  of  essen&al  products  and  services  to  the  local  consumer  markets   §  Technical  assistance  to  build  managerial  and  financial  capacity  
18. Impact  Support  Facility   18  
19. Grant  funding  provision  for  investees     §  Dedicated  research,  consultancy  and  knowledge  centre,  managed  by   Oxfam  GB   §  Grant-­‐funded  to  enable  shared-­‐cost  consultancy  provision  to   intermediaries   §  Uses  in-­‐house  Oxfam  staff,  external  experts  and  Symbio&cs  know-­‐how   to  assist  investees  to  maximise  their  impact  fulfillment  capacity  in   rela&on  to:   +  Data  capture,  repor&ng  and  verifica&on  methods   +  Strategy/business  model  impact  enhancement   +  Impact  narra&ve  communica&on   +  Impact  targets  selng  and  monitoring   +  Periodic  pormolio-­‐level  impact  evalua&ons   19  
20. Fund  Structure   20  
21.     21   SEIIF     (SICAV-­‐SIF)   Investees   Investors   Board  of   Directors   Investment   Commiaee   Advisory   Commiaee   Investment   Manager   Impact      Adviser   Agent  Bank,   Audit,  Legal   Impact  Support  Facility   Fund Structure
22. Board  of  Directors   § Nicholas  Colloff,  Director  of  Innova&on,  Oxfam  GB   § Roland  Dominicé,  CEO,  Symbio&cs  Group   § Arnaud  Gillin,  Director,  Innpact  Sàrl  (Luxemburg)     Investment  Commiaee   § Vincent  Dufresne,  Head  Asset  Management,  Symbio&cs   § Alan  Doran,  Business  and  Finance  Adviser,  Oxfam  GB   § Geetha  Tharmaratnam,  Head  of  ESG,  Aureos  Capital   § Gavin  Stewart,  CEO,  Scolsh  Widows  Pension  Fund   §   Stephen  Acheson,  Head  Fixed  Income,  Standard  Life       22   Governance
23. Contacts       Elizabeth  Lyle,  Oxfam  GB   +  44  (0)1865  472348     elyle@oxfam.org.uk         Coralie  Leresche,  Symbio4cs   +  41  (0)22  338  1551   coralie.leresche@symbio&csgroup.com     23  
24. +  The  Small  Enterprise  Impact  Inves4ng  Fund  –  SEIIF  –  (“the  Fund”)  is  addressed  to  informed  and  qualified  investors   possessing   the   exper4se,   experience   and   necessary   knowledge   to   adequately   assess   and   appreciate   an   impact   investment,   the   accrued   risks   and   the   absence   of   liquidity   associated   with   this   type   of   investment.   Prior   to   par&cipa&ng  in  the  Fund,  you  should  consult  with  your  own  legal,  regulatory,  tax,  financial  and  accoun&ng  advisors  to   the  extent  you  consider  necessary,  and  make  your  own  investment,  hedging  and  trading  decisions  (including  decisions   regarding  the  suitability  of  this  transac&on)  based  upon  your  own  judgment  and  advice  from  those  advisers  you  consider   necessary.     +  This  document  is  meant  for  informa4on  purposes  only,  it  cannot  cons4tute  an  offering  or  solicita4on  without  the   Prospectus  of  the  Fund.  The  distribu&on  of  the  Prospectus  is  only  authorized  if  it  is  accompanied  by  the  last  available   annual  report  of  the  Fund.  The  Prospectus  does  not  in  any  way  cons&tute  an  offer  or  sales  solicita&on  for  shares  in  the   Fund  and  cannot  be  used  for  purposes  of  offering  or  marke&ng  Fund  shares  in  jurisdic&ons  where  sales  of  Fund  shares   are  not  authorized.  This  presenta&on  as  well  as  the  Prospectus  may  not  be  transmiaed  to  anyone  who  might  not  have   the  legal  authority  to  receive  it.  It  is  the  responsibility  of  poten&al  investors  to  personally  inform  themselves  and  to   ensure  that  their  possible  par&cipa&on  in  the  Fund  complies  with  any  laws  and  regula&ons  in  the  jurisdic&on  applicable   to  them,  this  including  the  acquisi&on  of  any  governmental  or  other  authoriza&on  as  well  as  the  observance  of  any  other   formali&es  prescribed  by  these  jurisdic&ons.   Disclaimer   24