6. SAVAGE_ADB Inclusive Business Presentation v3

7/29/2019 6. SAVAGE_ADB Inclusive Business Presentation v3

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HOWTOFUNDANINCLUSIVEBUSINESSSEPTEMBER 2013

1The views expressed in this presentation are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board ofGovernors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their

use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's terminology.


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Agenda

1 Introduction To Unitus Capital

2 How UC helps companies grow

3 Client Examples: Janalakshmi Financial Services/ENCASH

5 Conclusion

4 Equity investments in Inclusive Businesses

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Institutional Investors Impact Funds Family Offices /

Foundations High Net Worth

Individuals

GovernmentInstitutions

GlobalInvestors

Debt & Equity CapitalMarkets

Structured Products Private Placements Mergers & Acquisitions Buy-side Advisory

Work

Microfinance Microinsurance Technology Renewable Energy Healthcare Education

Water & wastemanagement

Agriculture

SocialBusinesses

UNITUS CAPITAL

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Unitus Capital connects social businesses with the global capital markets


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Demonstrated ability to deliverinnovativetransaction structures and increase ourclients access to capital and attractive

investment opportunities

Raised ~$900 mn for 40 clients across emerging sectors likemicrofinance/rural banks, healthcare, education, renewable energy

Expansive geographic presence focused onhigh growth and emerging economies

Mandates in India, the Philippines, Pakistan, Singapore andChina

Mandates in Philippines, USA, Africa, China, India, Pakistan andAustralia

Strong pipeline of significant transactions Current pipeline of signed mandates totals over$250 mn

for ~20 clients

Strong investor relationships with a uniquemix of mainstream and social investors

Coverage of over 500 institutional investor groups

Talented core team of 18 professionals withstrong credentials

Alma mater includes leading institutions like Harvard BusinessSchool, MIT, Oxford, Duke University, ESCP-EAP, IIM

Ahmedabad, ISB, IIM Bangalore, MDI, IIT Kanpur, IIT Guwahati

Top tierinvestment banking and private equityexpertise

Talent pool from TVS Capital, World Bank, Acumen Fund, MorganStanley, Citigroup, UBS, Nomura, Lehman Brothers, KPMG,

Deloitte, SBI Capital Markets and Kotak

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UNITUS CAPITAL


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1. Establish short list and approach

2. Drive development of marketing documentation

Co-ordinate information requirements and arrange

site visits.

4. Manage due diligence

Co-ordinate closely with lawyers on all commercial

issues, and push through key contractual wish list.

5. Assist negotiation and final documentation

Negotiate, agree and outline terms subject to duediligence, investors internal approval and final

documentation

3. Determine heads of terms

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Throughout the process, UC commits to ensuring that the client has complete and up-to-date decision making information

A TRUE PARTNERSHIP THROUGHTHE ENTIRE TRANSACTION

Geoff WoolleyCo-Chairman

Narayan RamachandranCo-Chairman

Senior advisory panel

Core transaction team

Equity placement expertise + Execution support

Execution Management

Eric SavageCo-Founder and

PresidentAbhijit Ray

Co-Founder and MD

Project Lead

Gauravjeet SinghDirector

Amit Kumar RathiVice President

CLIENT

Develop marketing documentation in collaborationwith the client, including teaser document,information memorandum, managementpresentation, process letter, etc.

Establish formal dialogue with a willing investorcandidates

Kylie CharltonCo-Founder & MD

Ann ShortChief OperatingOfficer


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82,161

193,150

300,847

695,974

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65

177

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20

40

60

80

100

120

140

160

180

200

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2010 2011 2012 2013

Borrowers Gross Portfolio outstanding (in USD million)

CLIENT PROFILEJANALAKSHMI FINANCIAL SERVICES

UC has helped Janalakshmi Financial Services, a Bangalore based microfinance institution,raise $90 mm in equity and $80 mm in debt over the last four years.

Janalakshmi provides savings, loans, pensions, insurance and other critical products totheir clients in urban India.

UC took an early bet on a very promising MFI with a visionary founder, strong technology and great management.

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CAGR: 114%


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CLIENT PROFILE ENCASH

Headquarter Manila, Philippines

Business

Provides retail ATMs, ATM process outsourcing and software services to

Philippine thrift, cooperative and rural banks. Enables them to provide their rural customers access to a wider range offinancial products and services.

Equity Raised USD 3 million (February 2012)

Investors Incofin Investment Management, ResponsAbility

Impact

The funds raised helped ENCASH to substantially increase their ATM network byapproximately 850 ATMs to about 1200 ATMs.Provided much needed financial services to an estimated additional 2.5 mm rural

Filipinos.First equity transaction in the Philippines for Incofin.


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Equity Vs. Debt Financing

Advantages: Frees up working capital, pristine

financial history not needed, access to investorsnetworks, typically doesnt have rigidly definedrepayment amount or interest payments

Disadvantages: Investors entitled to a share of theprofits, and can have a say in companymanagement, therefore finding the right investor iskey

Equity Financing:

Selling a portionof your business

to investorsthrough a share

offering

Advantages: Retain ownership of business, buildsbusiness credit, interest payments are tax deductible

Disadvantages: Monthly payments drain workingcapital, putting assets up as collateral, credit ratingsuffers if payment obligations arent kept, high debt =high risk to investors for future equity raises

Debt Financing:

Getting a loanfrom a financialinstitution


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Key components of a business plan

Executive Summary Essentials about the company in 1-2

pages

Company Description Management Overview & Products andServices

Industry Overview Defining the addressable market andcompetitors

Strategy & Roadmap Marketing, sales, expansion plans, andtargets and benchmarks

Competition Overview of the competitive dynamics ofthe business

Financials Income Statement, Balance Sheet,Cash Flow, Projections to showprofitability

Funding How Equity/Debt funds will be allocated

Annexure Supporting Documents, charts, etc.


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EQUITY INVESTMENTSIN INCLUSIVE BUSINNESSWhat Investor are looking for:

Growth Investors are seeking capital appreciation through growth

Transparency High Level of transparency provides greater confidence to the investor community. Governance- Good governance is essential for the benefit of all stakeholders, especially investors.

Founder/s and senior management team A reputed promoter group and a seasoned management team

Profitability: A company that is profitable or has a clear path to profitability will have considerable leverage overinvestors

Technology: The level of technological symbiosis with the business is an important factor, as it directly relates tothe efficiency of the business.

Potential Investors in the Inclusive Business space:


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Social and financial performance metrics

Equity Internal Rate of Return (IRR) Gross Margin EBITDA PAT Valuation Metrics

Price/Earnings Ratio Price/Book Ratio Price/Revenue Ratio

Financial Metrics

Social MetricsA Consensus is still forming

Counting something and making it count IRIS Double/Triple Bottom Line PPI (Grameen Foundation)


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UNITUS CAPITAL (UC) IS THE WORLDS LEADING SOCIAL INVESTMENT BANK

Named as the #1 investment bank in Asia in 2012 by social investment deal volume.

Unitus Capital is a highly trusted advisory in the social impact space.

We have a world class team with deep experience in PE, VC and banking.

Ourmission is to act as a catalyst between the investors and the social enterprises.

UC would be happy to explore helping any inclusive business that isconsidering accessing foreign equity.

UNITUS CAPITAL

Unitus Capitals main focus is the BoP population

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THANK YOU