Archive for the 'Impact Investing' Category
August 13th, 2010 by Tom Minney
According to a recent study, $25–$30 billion in new investment will be needed in health-care assets, including hospitals, clinics, and distribution warehouses over the coming 10 years to meet the growing health care demands of Sub-Saharan Africa. The study is “The Business of Health in Africa: Partnering with the Private Sector to Improve People’s Lives”, prepared by the International Finance Corporation (www.ifc.org) with consultancy McKinsey & Co www.mckinsey.com.
It notes that health care in most of sub-Saharan Africa remains the worst in the world. The region has 11% of the world’s population, yet bears 24% of the global disease burden and commands less than 1% of global health expenditure. Increased attention from outside donors has resulted in some remarkable initiatives, funneling billions of dollars to help combat HIV/AIDS, tuberculosis (TB), and malaria the worst health scourges of the region. In spite of billions of dollars of international aid, an astonishing 50% of Sub-Saharan Africa’s total health expenditure is financed by out-of-pocket payments from its largely impoverished population. Because of economic growth, the study estimates the market for health care will more than double by 2016, reaching $35 billion.
Most of the sub-Saharan Africa lacks the infrastructure and facilities to provide and deliver minimal levels of health services and products. It also faces a severe shortage of trained medical personnel, with just 3% of the world’s health workers deployed there.
The IFC report highlights the critical role of the private sector in meeting the need for more and higher-quality health care and identifies policy changes that governments and international donors can make to enable the private sector to take on an ever more meaningful role in closing Africa’s health care gap. About 50% of health-care provision already comes from for-profit companies, non-profit organizations and social enterprises, along with insurers, providers, and manufacturers. Their role is growing.
The expected improvement in Africa’s macroeconomic climate over the next decade will expand the health care gap, as higher incomes will create new demand. The biggest individual investment opportunities will be in building and improving the sector’s physical assets. Around 550,000–650,000 additional hospital beds will need to be added to the existing base. An additional 90,000 physicians, about 500,000 nurses, and 300,000 community health workers will be required over and above the numbers that will graduate from existing medical colleges and training institutions. Demand for better distribution and retail systems and for pharmaceutical and medical supply production facilities will also be strong.
An estimated $25–$30 billion in new investments will be needed to meet demand between now and 2016—of which $11–$20 billion is likely to come from the private sector. A broad range of investment opportunities exist across all components of the health care industry in the region (as described in detail in the annexes to this report). These opportunities can deliver compelling financial returns and have an enormous potential development impact.
Health care provision accounts for roughly half the investment opportunity, with the remainder split across distribution and retail, pharmaceutical and medical product manufacturing, insurance, and medical education. These investments will fund capacity expansion, new businesses, and renovation of existing assets. About half of these investments are expected to be made by for-profit entities, the remaining portion of private sector investment being equally spread between social enterprises and nongovernmental organizations (NGOs).
The vast majority of the investment opportunities in the near term will be in the SME sector. Only a quarter of the opportunities are expected to have a project size larger than $3 million. This report also highlights the availability of investment opportunities in social enterprises that, while delivering lower financial returns, can have a tremendous role in the positive development of Sub-Saharan Africa.
August 13th, 2010 by Tom Minney
Agenda to mobilize the responsible development of private sector health care in sub-Saharan Africa:
1. Develop and enforce quality standards. Initial efforts at enhanced regulation could have large and immediate benefits. Financial and technical support is needed to strengthen the ability of public and private regulatory bodies to develop and enforce transparent and effective quality standards.
2. Foster risk-pooling programmes. Risk pooling arrangements— such as government-funded national payment schemes, commercial insurance, or community non-profit mutual schemes—have enormous potential to improve the financing of health care in the region, thereby encouraging the development of higher-quality, more organized private sector providers.
3. Mobilize public and donor money to the private sector. Donors can help build health-care capacity by earmarking some aid to fund private sector entities directly while also assisting local governments to expand their procurement capabilities and manage contracts with the private sector. Employers can foster the development of the local private health care sector by outsourcing provision of health care for their employees.
4. Modify local policies and regulations to foster the role of the private sector. Opportunities exist to reform the regulations that inadvertently block the development of the private health sector. The primary focus should be streamlining bureaucratic processes, liberalizing human resource regulations that perversely reduce the number of active health care workers, and reducing tariffs and other import barriers that impede access to or raise the cost of health supplies.
5. Improve access to capital. Entrepreneurs and business enterprises in Sub-Saharan Africa have trouble securing financing from established institutions. Three initiatives could tackle this issue: (i) educating local banks about the true risk profile of the health care sector; (ii) using international financial backing to encourage local financial institutions to lend to health care enterprises, including small and medium-sized enterprises (SMEs); and (iii) developing equity-focused financing vehicles for health care enterprises.
August 12th, 2010 by Tom Minney
Top names in Impact Investing are gathering in London on 30 Nov-1 Dec for an Impact Investing Forum organized by Hanson Wade. This is a fast-growing sector, both for investors who want to see their funds contribute to sustainability in the world and support development and fight poverty, and for investors who are looking for an alternative asset allocation strategy. The theme is “Engage as an Investor: Identify the Right Products, Ensure Commercial Returns, Measure Impact”.
Organizer Amy Miller says the meeting “will bring together investors who are looking to diversify their investment portfolio, tackle global environmental and social challenges and make a strong commercial return on investment”.
The agenda is aimed at practical lessons so that today’s largest commercial, institutional and philanthropic investors will learn how to overcome the barriers and risks presented by impact investing. Delegates will have the chance to learn from experienced speakers and many case studies to determine how to benefit from the social, environmental and financial returns of impact investing and become pioneers in this space.
It puts special emphasis on project identification, infrastructure building and impact measurement.
Confirmed speakers include many of the leading names of impact investment, including industry bodies, experienced investors and new funds:
• Rob Lake, Head of Sustainability, APG
• Emily Bolton, Director, Social Finance
• Mark Campanale, Founder, Social Stock Exchange
• Roger Frank, Managing Director, i3
• Matt Christensen, Executive Director, EUROSIF
• Adam Ognall, Deputy Chief Executive, UKSIF
• Bernie Morgan, Chief Executive, CDFA
• Ebba Schmidt, Responsible Investment Manager, Pension Protection Fund
• David Carrington, Independent Consultant
• Vineet Rai, Managing Director, Aavishkaar
• Gerhard Pries, President, Sarona Asset Management
• Simon Merchant, CEO, Jacana
• Nigel Kershaw, CEO, Big Issue Invest
• Audrey Selian, Director, Rianta Capital
• Katinka Vacranenburgh, Secretary General, The International Interfaith Investment Group
• Michele Giddens, Executive Director, Bridges Ventures
• Tanya Beya, Investment Director, IGNIA
• Beth Richardson, Director, GIIRS
The meeting will be at The Montague Hotel, London, from 30 November-1 December. For more information look at www.hansonwade.com.
The provisional agenda includes action-packed days, with some of the sessions focusing on important tools and topics such as:
1. Measuring financial returns and detailed discussions on ways of measuring social and environmental impacts
2. The roles of foundations, faith-based investors and family offices, with speakers from leading institutions
3. Social infrastructure, including the development of a Social Stock Exchange in UK and Nexii in South Africa.
4. The potential of impact investing for retail investors
5. Four funds highlighting their roles
6. The potential for partnerships between profit and not-for-profit
7. Case studies on investing in micro-finance, small and medium enterprises, education, clean tech, reforestation and emerging markets.
For more information, contact Amy Miller, Programme Director, Impact Investing, tel: +44 203 141 8727,
email amy.miller@hansonwade.com or see the conference website www.hansonwade.com.
July 26th, 2010 by Tom Minney
Activists are calling for a tax of 0.005% on all financial transactions worldwide, to raise some $33 billion dollars per year for development and particularly to replace dwindling funding for life-saving AIDS drugs. Protestors at the world AIDS forum in Vienna on 21 July said a “Robin Hood” tax on financial transactions would be one of a series of new funding initiatives, and said the time is right to propose it ahead of a review summit on Millennium Development Goals in September and a G20 meeting in November.
Funding from by rich donor nations to poor countries fighting HIV and AIDS fell back in 2009 to $7.6 billion, from $7.7 bln in 2008. The turnaround set alarm bells ringing for tens of thousands of people in Africa who are kept alive through expensive courses of ART drugs. Cutbacks could be a death sentence.
The 2009 decline ended 6 years of increases averaging more than 10% a year. The Global Fund to fight AIDS, Tuberculosis and Malaria is seeking $17 bln in pledges for 2011-2013, compare to total funding of $1.2 bln for anti-HIV drugs and other initiatives in 2002.
According to news reports, campaigners at the AIDS forum said it was time for innovative financing solutions for development. Dr Philippe Douste-Blazy, former French Minister of Foreign Affairs and Special Adviser on Innovative Financing for Development, said: “It is up to us to explain to the Heads of State that that they do not have any other solution because we know it only depends on political will.” His organisation UNITAID (www.unitaid.eu) has implemented a small tax on airline tickets. In its first 2 years of existence UNITAID committed $730 million of fresh funds to tackle HIV and AIDS, malaria and tuberculosis. A portion of thoe funds came from low- and middle- income countries, mostly through the air tax mechanism. UNITAID, in partnership with the Clinton Health Access Initiative (www.clintonfoundation.org) has stimulated the manufacture of new medicine formulations as well as funded an integrated package of care for HIV-positive children.
July 7th, 2010 by Tom Minney
A UK-based investment and advisory firm concentrating on African venture capital managers has announced its first investment. Jacana Venture Partnership (www.jacana.org) on 29 June announced that it will invest in InReturn Capital (www.inreturncapital.com), a Kenya-based firm investing in East African small and medium enterprises.
Jacana’s aim is that by promoting a thriving venture capital industry in Africa it will enable small- and medium-sized enterprises (SMEs) to grow and help millions out of poverty through economic development and job creation. Jacana’s unique offering of capital and expertise will enable InReturn to reach its goals more rapidly. Access to finance is a major obstacle to the growth of African businesses.
According to Jacana’s mission statement, SMEs are a crucial driver of economic development in Sub-Saharan Africa. Every $1 invested in an SME generates an additional $10 in the local community and $1 of SME finance creates 3 times more jobs than an equivalent investment in microfinance.
International investors are increasingly interested in Africa but find it hard to choose SME fund managers in the target country since they often lack track records. Jacana mitigates this risk for investors by selecting high-quality teams and providing intensive support to local fund managers through a network of expert mentors – highly experienced private equity and venture capital professionals who can provide hands-on support to local teams. Stephen Dawson, Jacana’s Chairman, has over 30 years’ experience in UK private equity and is already actively involved with InReturn’s deal team in Nairobi.
Jacana selected InReturn as its first local partner because of its strong team and deal pipeline, after an extensive market review. InReturn’s East Africa Fund (target size $20 million) invests in SMEs in East Africa. The capital invested in InReturn’s business will support the expansion of the team into Tanzania and Uganda.
InReturn contributes to the profitability, sustainability and growth of the companies that it invests in through the active participation of its local investment team of 5 Kenyan and European professionals. InReturn East Africa Fund maintains a network of investors in Western Europe and has extensive financial and management experience.
Anthony Gichini, Managing Partner for InReturn Capital in Nairobi, said “Jacana’s investment of capital and expertise will help us to accelerate our business, and deliver returns to our investors as well as development impact in East Africa. Tanzania and Uganda are important markets for InReturn and we see significant opportunities to expand our team into these countries as we build our business together with Jacana”.
Jacana’s expertise, provided through its network of private equity expert mentors, will help InReturn to execute high-quality transactions and raise additional capital from international investors, using Jacana’s extensive contacts in the industry. Together, Jacana and InReturn aim to deliver attractive financial returns to investors in the fund, grow the private equity industry in Africa and thereby support the sustainable development of SMEs, leading to significant job creation in Africa.
Simon Merchant, CEO and co-founder of Jacana, commented in a press release: “This is the first step in growing our network of African partners, supported by international private equity experts. We are delighted to be working in close partnership with InReturn and look forward to supporting this excellent team in making successful SME investments in East Africa.”
Jacana aims to select the capital managers with highest potential growth for inclusion in the partnership network and then to work closely with them to create an attractive investment opportunity for international investors. Jacana is talking to several candidates for its next investment.
June 18th, 2010 by Tom Minney
South Africa’s first, specialised, private equity clean technology fund, Evolution One Fund, has reached its final closing after raising R700 million (US$92 million) from local and foreign investors, including development finance institutions, a family office and sovereign wealth funds. This capital is to be invested into equity in clean technology projects and enterprises including new energy and environment focused technologies in South Africa and across the Southern African Development Community. Evolution One will concentrate on long-term equity and equity-related investment based on active management and adding value after investing.
The fund will prioritise investments in expansion capital but will consider earlier-stage environmental infrastructure projects when there is clear evidence of early revenue streams and profitability. The fund will also invest into proven technology or projects that clearly demonstrate market adoption. The minimum investment size is R10 million ($1.3 million) and its maximum investment is R100 million into any one project or technology.
Consensus Business Group (www.consensusbusiness.com), the London-based advisor to The Tchenguiz Family Trust, has played a leading role in establishing and advising the fund. Consensus owns or manages 300,000 UK residential units and £4 billion of commercial properties, as well as extensive “clean tech” investments. As founding cornerstone investor, Consensus has secured the participation of 7 other leading international organisations.
Vincent Tchenguiz, Chairman of Consensus said: “We have extensive experience and a long track record in global clean technology investing and this has given our partners the confidence to join with us in setting up Evolution One in South Africa. We are delighted to have successfully achieved final closing of this ground-breaking fund.
“Evolution One Fund is the first dedicated clean technology private equity fund to be established for Africa and its value proposition is to bring Consensus’s active financial modelling and specialist insights together with expertise to projects and technology enterprises in South Africa and the SADC region. In addition, the investment capital of this network of leading investment institutions inherently leverages access to specialised knowledge and skills in the broader global clean technology sector.
“The Fund is advised by a fund management team comprising 9 principals and analysts who collectively bring their unique breadth and depth of commercial, financial and sustainability credentials. This is combined with strong black empowerment credentials and the ability to structure broad-based black economic empowerment transactions.”
Consensus is joined in the Evolution One partnership by IFC, a member of the World Bank Group; the Finnish Fund for Industrial Cooperation (Finnfund); the Swiss Investment Fund for Emerging Markets (SIFEM); fund of funds the Global Energy Efficiency and Renewable Energy Fund (GEEREF- www.eif.org), a compartment of the European Investment Fund; the African Development Bank (AfDB); the Norwegian Investment Fund for Developing Countries (Norfund); and the Industrial Development Corporation of South Africa (IDC).
The local South African fund advisor is Inspired Evolution Investment Management (IEIM – www.inspiredevolution.co.za), which aims to support and guide target invested companies and provide long-term capital growth. The Evolution One fund is a 10-year fund is committed to investing into clean technologies in the new energy and environmental sectors, including cleaner energy generation such as wind and solar energy, and energy efficiency, cleaner production and more efficient manufacturing processes, air quality and emissions control, water quality and resource management, waste management, agribusiness, natural products and materials and related services for sustainable buildings.
Michael Brooks, CEO of IEIM, says the fund management team has already appraised numerous deal opportunities and within weeks would announce details of the first 3 investments to be undertaken by the fund: “In the past 2 years we have seen significant positive shifts in the commercial thinking underpinning the roll out of clean technology projects and enterprises, both within the public and private sectors.
“The South African government’s recent adoption and implementation of the Renewable Energy Feed-in Tariffs and Co-Generation Feed-in Tariffs are evidence of the state’s support for regulatory drivers to underpin the development at scale of commercially viable renewable energy projects here and in our neighbouring countries. We are currently actively engaging with a range of promoters of clean technology enterprises and with developers of renewable energy projects.”
The first close of the fund was announced in July 2008 when $54 million had been raised from the initial 4 investors: IFC, Castleway Properties (owned by Tchenguiz Family Trust), SIFEM and FinnFund.
June 13th, 2010 by Tom Minney
A top line-up of speakers from the financial community launched the Africa Sustainable Investment Forum (AfricaSIF- http://www.africasif.org) on 9 June at the Johannesburg Stock Exchange (www.jse.co.za).
Speaking at the launch, AfricaSIF co-founder Graham Sinclair said it is a strategic new step in facilitating investment in Africa that purposefully integrates environmental, social and governance (ESG) factors: “Africa needs capital, but it does not benefit from capital that does not develop our continent sustainably. AfricaSIF aims to attract new capital in new ways to Africa and help to grow sustainable investment on the continent by taking a long-term interest in Africa’s economic development.
“2010 is set to be a landmark year for Africa. With the world’s eyes on the FIFA World Cup kicking off in SA in just two days’ time, massive infrastructure development is taking place and the knock-on effects for the economy and business are immense. Africa has about the same number of potential consumers as India or China. After 40 years of sub-par growth, Africa’s GDP grew at 5% for five straight years from 2002, putting Africa back on the global investment radar.”
AfricaSIF describes itself on its website as “a network, knowledgebase and advocate for sustainable investment in Africa. We are currently developing an independent, pan-African not-for-profit network of investment practitioners promoting sustainable development on the continent by attracting investment in the public, private and philanthropy sectors across asset classes, countries and stakeholders from the platform at africasif.org.”
Speakers at the launch included Jay Naidoo (Chair of both Development Bank of South Africa and Global Alliance for Improved Nutrition), Judge Mervyn King (Chair of the Global Reporting Initiative and King Commission), Simon Harford (Partner: Africa, Actis), Tim Turner (African Development Bank Director), Corli le Roux (Legal Counsel for the JSE), Wanjiru Kirima (Chairperson of the Principal Officers’ Association) and JP Fourie (South African Venture Capital Association).
“AfricaSIF is a pioneering network which believes in the triple bottom line of people, profit and planet,” said Simon Harford, whose company Actis has over 60 years’ experience of private equity in Africa. “AfricaSIF’s work lays the foundations upon which strong, long-term and sustainable businesses are built.”
“This initiative launched at the JSE will create a network of best practice on ESG factors in investment for the continent,” said AfDB’s Tim Turner.
Sinclair adds that analysis in March 2009 indicates approximately $6.9 trillion, including $300 billion in emerging markets was invested integrating ESG factors, but wonders how much of this is in Africa. “AfricaSIF will provide services and opportunities for our members to work together to align investment profitability with social and environmental responsibility in Africa. We are also working on the first ever report on the state of sustainable investment in Africa, scheduled for release in December 2010,” he says.
AfricaSIF was hosted at Africa’s largest stock exchange to emphasise the practical nature of AfricaSIF, a network as a meeting place for the whole investment value chain, attracting capital to sustainable businesses across asset classes.
“The over 400 members of Principal Officers Association are asset owners that are increasingly driving alignment of their fund managers and service providers toward the sustainable investment theme. AfricaSIF is a new element of the investment ecosystem that will play a vital catalytic role across Africa in accelerating this process,” said Wanjiru Kirima, chairperson of the Principal Officers’ Association and AfricaSIF co-founder.
“Our members are actively seeking opportunities to deploy investment in clean tech and other sustainability themes in Africa”, said SAVCA’s JP Fourie. “We look forward to working with and in the AfricaSIF network”.
Further launch events are scheduled to take place in Cape Town end June, Lagos, Nairobi, Cairo/Tunis, Geneva, London, Paris, New York and Boston. The first annual AfricaSIF conference, ESG Africa, is in partnership with global ESG specialist journal Responsible Investor (www.responsible-investor.com) and other partners, and scheduled for December 2010.
With thanks to African investor (http://www.ainewswire.com).
June 9th, 2010 by Tom Minney
South Africa’s JSE stock exchange (www.jse.co.za) is requiring listed companies to integrate their sustainability reports with their annual reports, with effect from this month. According to a report in Business Day newspaper (www.businessday.co.za) Mervyn King, chairman of the King committee and a leading expert on governance, said: “SA is among the first countries in the world to require integrated reporting of listed companies. This puts us ahead of the game.”
The newspaper says there are still no set standards for companies’ integrated reporting, and Mr King will chair a new Integrated Reporting Committee to issue guidelines on good practice in integrated reporting.
The King Report on Corporate Governance in South Africa 2009 (King III) includes an integrated report disclosure checklist, effective March 2010, according its publication by Ernst & Young. Companies should apply this, or explain why they feel it approroriate not to apply or to apply it differently (“apply or explain”). An integrated report should contain “adequate information on the operations if the company, the sustainability issues pertinent to its business, the financial result and the results of its operations and cash flows”.
Jayne Mammatt, an associate director in governance and sustainability at Ernst & Young, was cited in the newspaper saying an integrated report should evaluate all areas of performance, including economic, social and environmental issues. It was not sufficient for companies to provide wordy platitudes and vague estimates, Ms Mammatt said. It cites a 2009 study by Ernst & Young showed that only a handful of 3,000 sustainability reports around the world were integrated.
Mr King is quoted as saying: “The corporate identity of companies has changed and so reporting has to change. Stakeholders need to make informed assessments about the longer-term sustainability of a company and that it is operating as a responsible corporate citizen.” The requirement is likely to make more work for companies.
The founding organisations of the committee include the Association for Savings and Investment SA, Business Unity SA, the Institute of Directors SA, the JSE and the South African Institute of Chartered Accountants (Saica). Graham Terry, Saica’s senior executive of strategy and thought leadership will chair a working group whose first task will be to develop a framework for integrated reporting.
Leon Campher, CEO of the Association for Savings and Investment, was quoted saying the project was considered a priority initiative, given the volumes of annual reports generated by the association’s members. “We have 153 member companies managing in excess of R2,5-trillion of assets. Integrated reporting will facilitate more holistic and meaningful reporting of financial results, enabling shareholders and clients to gain a better understanding of a company’s triple bottom line.”
Freda Evans, chief financial officer of the JSE, was quoted as saying: “Reporting on the financials alone is no longer sufficient, as all aspects of the business – environmental, social and governance aspects – affect the company’s bottom line.”
Saica CEO Matsobane Matlwa was cited: “Corporate reporting is entering a new era. Shareholders and other stakeholders need broader information to enable them to make more informed decisions about a company. This does not necessarily mean more detail, but greater insight into the strategy, risks and value creation of the company.”
May 11th, 2010 by Tom Minney
The Global Impact Investing Network (GIIN – www.globalimpactinvestingnetwork.org) has held the inaugural meeting of its Investors’ Council, bringing together leading global impact investors, who use for-profit investment to address social and environmental challenges. The meeting was held from 26-28 April in New York. The agenda covered broad industry issues, such as impact measurement and lessons from the microfinance industry, as well as more specific strategies including community bank deposits and trade financing.
The GIIN Investors’ Council is designed to help active impact investors learn from one another and increase the scale and effectiveness of their initiatives. More than 25 member organizations attended this event. They represent different financial institutions including specialized banks, targeted impact funds, large-scale family offices, private foundations and institutional investors.
Camilla Seth, Director of Programs and Operations at the GIIN says: “Impact investing has drawn increasing attention over the last year, and this meeting was the first opportunity for the leading practitioners to collectively address the opportunities and challenges faced by the industry.
“The GIIN and its Investors’ Council members share a belief that through collaboration we can achieve better and bigger results.. these impact investing leaders productively discussed how to broadly accelerate the pace of impact investment, increase the creativity, ambition, and scale of the approaches undertaken, and improve our understanding of the real social and environmental impact of these investments.”
The GIIN Investors’ Council was launched in September 2009 as a core programme to provide a global collaboration platform to expand learning about new investment opportunities, facilitate sharing lessons learned, highlight and disseminate best practices, and enable opportunities for collaboration and partnership among members. As leaders in the industry, Investors’ Council members are also engaged in developing tools and other resources aimed at serving the broader impact investing industry.
The GIIN Investors’ Council has 30 members: Acumen Fund, Annie E. Casey Foundation, Armonia (Lunt Family Office), Bill and Melinda Gates Foundation, Calvert Foundation, Capricorn Investment Group, Citi Foundation, Deutsche Bank, DOEN Foundation, Equilibrium Capital, Gatsby Charitable Foundation, Generation Investment Management, Gray Ghost Ventures, IGNIA, J.P. Morgan, Leapfrog Investments, Lundin for Africa, National Community Investment Fund/ShoreBank Corporation, Omidyar Network, Prudential, Rockefeller Foundation, Root Capital, Sarona Asset Management, Skoll Foundation, SNS Asset Management, TIAA-CREF, Trans-Century, Triodos Bank, W.K. Kellogg Foundation, and Wolfensohn Fund Management.
The GIIN is a not-for-profit organization dedicated to increasing the scale and effectiveness of impact investing by building critical infrastructure and supporting activities, education and research to help accelerate the development of a coherent impact investing industry. The GIIN is also overseeing the development and adoption of the Impact Reporting and Investment Standards (IRIS), a common vocabulary and framework for measuring and reporting the social and environmental performance of impact investments.
March 24th, 2010 by Tom Minney
Private equity fund manager Aureos Capital (www.aureos.com) has signed up for a UN-backed globally recognized initiative to promote responsible investment. Aureos specializes in investing into small to medium-sized businesses in emerging markets and it recently signed up to the United Nations Principles for Responsible Investment (UNPRI) initiative.
UNPRI (www.unpri.org) was established in 2005 by 20 of the world’s largest institutional investors. There are currently over 700 institutional investors, investment managers and professional service partners who have signed up to the Principles. It reflects the core values of investors who take a long-term view to the realisation of value from investments. This makes it particularly suitable for Private Equity investors, whose investment portfolio horizons are generally medium to long term.
Since its establishment in 2001, Aureos has increased its funds under management to over US$ 1.2 billion and extended its geographical footprint to over 50 emerging markets covering Asia, Africa and Latin America, by establishing 16 regional private equity funds. In a company announcement on Tuesday (23 March), it said it has long been committed to sustainable investing.
Aureos uses its network of professionals to ensure Environmental, Social and Governance (ESG) factors are integrated and it has extensive experience investing in Latin America, Africa, Asia and the Pacific to enhance the long-term value of portfolio companies.
Sev Vettivetpillai, Chief Executive Officer of Aureos Advisers Ltd, comments: “Our proactive approach to the consideration of ESG in portfolio companies and the communities in which they operate aligns commercial objectives with lasting development impact. We are successful in our approach through our partnership with our investors, employees, entrepreneurs and the people in the regions in which we operate.”
“Adhering to the principles of responsible investing is all the more important in emerging markets where there is often less regulation governing the impact of companies on the environment, or less enforced corporate governance standards.”
“We believe there is a positive correlation between the rigorous application of high ESG standards and financial returns for investors. It is a matter of mitigating investment risk. We are thrilled that these principles are now promoted by an institution with the global standing of the United Nations.”
The UNPRI is currently involved in a two-year promotional project in emerging markets. Aureos plans to spearhead a new drive promoting UNPRI’s credentials and addressing the G20’s recent commitment to financing small and medium-sized businesses in emerging markets.
Sev Vettivetpillai says: “Investing in SMEs in emerging markets is our key activity so we are delighted to be working with the UN to promote this.”
Principles include:
• Incorporating environmental, social, and corporate governance (ESG) issues into investment analysis and decision-making processes
• Being active owners and incorporating ESG issues into ownership policies and practices
• Seeking appropriate disclosure on ESG issues by the entities in which are invested
• Promoting acceptance and implementation of the principles within the investment industry
• Working together to enhance effectiveness in implementing the principles
• Reporting on activities and progress towards implementing the principles.