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Investing in Microfinance – combining financial returns and sustainable development. responsAbility Global Microfinance Fund Klaus Tischhauser Managing Director, responsAbility Luxemburg, October 14th, 2004.

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investing in microfinance combining financial returns and sustainable development

Investing in Microfinance – combining financial returns and sustainable development

responsAbility Global Microfinance Fund

Klaus TischhauserManaging Director, responsAbility

Luxemburg, October 14th, 2004

slide2
responsAbility Social Investment Services Ltd.A Social Investments company based on a unique cooperation

Other partners

Founders

  • Unique cooperation of different banks and institutions
  • Cooperation of private and public sector
responsability global microfinance fund ragmf
responsAbility Global Microfinance Fund (rAGMF)

Empower

a better world

to stand

on its own

two feet

responsAbility Global Microfinance Fund

slide4

The responsAbility Global Microfinance FundKey fund characteristics

  • Stable capital appreciationthrough large portion of fixed income investments (refinancing of MFIs’ credit portfolios)
  • Additional growth potentialthrough limited share of equity (participations in MFIs)
  • Access to the best Microfinance expertise and investmentsthrough Partner Concept
  • 100 % Microfinance exposure
  • Reporting on social impact
slide5

The basis of a unique approachAnalysis of …

  • … investors’ needs
  • … financial market’s needs
  • … structure of the microfinance market
  • … needs of microfinance institutions
  • … microfinance market development
  • Definition of an adapted approach: Partner Concept
slide6

The structure of the Microfinance marketStructure and players

IFIs & IFC, seco, SDC, FMO KfW, EBRD, Norfund, Opec Fund,

Donors Finnfund, Swedfund, EIB, IADB, Ford Foundation, Open Society Institute …….

Specialized Alterfin, IPC, Triodos, CreditoSud, BlueOrchard, Oikocredit, Fides, WWB,

Organisations, Networks Cyrano Mgmt, Integra, DID, Shore Bank, ECLOF, Acción, Vernius, FINCA ……………..

Investment Vehicles ProFund, AfriCap, AIM, ShoreCap, LA-CIF, LFP, Oikocredit, ‘

& other products IMI, Dexia MCF, Triodos Funds, Sarona Global Investment Fund, MFI-Bonds….

Market Microfinance Institutions

Microentrepreneurs

slide7

The Partner Concept of the rAGMFAdapted to the Microfinance market and investors‘ needs

  • Unique access
    • to specific know-how
    • local expertise
    • to instruments with specific focus and limited access
  • High degree of diversification
    • different asset classes
    • geographically over continents and regions
    • over styles and approaches
  • Absorption capacity

IFIs and donors

Specialized organisations and networks

Investment vehicles and other products

Microfinance Institutions

Microentrepreneurs

slide8

The Partner Concept of the rAGMFAdapted to the Microfinance market and investors‘ needs

Investors

IFIs and donors

Specialized organisations and networks

Investment vehicles and other products

DMCF

■ ■ ■ ■ ■ ■ ■ ■ ■ ■■■■ ■ ■ ■ ■ ■■ ■ ■■ ■

Microfinance Institutions

■ ■ ■ ■ ■ ■ ■ ■ ■ ■■■■ ■ ■ ■ ■ ■■ ■ ■■ ■

Microentrepreneurs

slide9

responsAbility Global Microfinance FundCurrent portfolio, performance and allocations(as of end of September 2004)

Performance

  • NAV USD NAV CHF

Asset allocation

  • Liquidity/other
  • Fixed income
  • Equity

Geographical allocation

  • Latin America
  • Eastern Europe & Central Asia
  • Asia (South/Southeast/East)
  • Africa
slide11

The responsAbility Global Microfinance FundWhy and how to report on impact?

  • Monthly report with basic data
  • Yearly Impact Report
    • No proof – qualitative and quantitative
    • Report about impact measurement initiatives Benchmark orientation – Millennium Development Goals (MDG)
    • Impact reports of rAGMF’s investments – MDG relevance
    • Continuous development and improvement
    • Start a dialogue
responsability global microfinance fund ragmf1
responsAbility Global Microfinance Fund (rAGMF)

Empower

a better world

to stand

on its own

two feet

responsAbility Global Microfinance Fund

slide13

The roles of responsAbility and its investment partnersBroad diversification and access to know-how and expertise due to Partner Concept

  • responsAbility
  • Investment Strategy, financial/social objectives
  • Selection and monitoring of investment partners
  • Selection of investment vehicles
  • Investment decision, veto resp.
  • Strategic and tactical allocations of sectors, countries and currencies
  • Risk management
  • Monitoring of all investments
  • Reporting to investor
  • Cash management

Strategic AA

TOP

DOWN

Tactical AA

Investment-Partner

  • Local selection and monitoring
  • Investment proposals
  • Reporting to responsAbility

BOTTOM

UP

„MFI Picking“

responsability global microfinance fund linking markets in an unique way
responsAbility Global Microfinance Fund Linking markets in an unique way

Investors

DMCF

■ ■ ■ ■ ■ ■ ■ ■ ■ ■■■■ ■ ■ ■ ■ ■■ ■ ■■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■■■■ ■ ■

Microentrepreneurs

slide15

The Partner Concept of the rAGMFAdapted to the Microfinance market and investors‘ needs

Investors

IFIs and donors

Specialized organisations and networks

Investment vehicles and other products

DMCF

■ ■ ■ ■ ■ ■ ■ ■ ■ ■■■■ ■ ■ ■ ■ ■■ ■ ■■ ■

Microfinance Institutions

■ ■ ■ ■ ■ ■ ■ ■ ■ ■■■■ ■ ■ ■ ■ ■■ ■ ■■ ■

Microentrepreneurs

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