Upload
others
View
6
Download
0
Embed Size (px)
Citation preview
Finn Ivar Marum EVP - SME Fund and Agribusiness Investments
25 %
16 %
12 %7 %6 %
7 %
4 %3 %
20 %
Agribusiness
Manufacturing
Wholesale/ Trade
Financial Services
Health and social work
Communication
Education
Energy
Other
PE FUNDS WITH SME FOCUS
2
WHAT
• Investments in small and medium-sized enterprises (SMEs) via external fund managers
WHY
• Shortage of risk capital especially pronounced for SMEs
• Investing through funds enables outreach far beyond Norfund’s own capacity constraints
Africa
MNOK1 400
MNOK250
Latin America
MNOK400
Asia
COMMITTED
2 056 MNOK
FINANCED
632 SME investments
31.12.2017
FUND STRATEGY
3
AdditionalityRisk
Capital
Managing
Monitoring
Active
Inexperienced fund managers and/ornew fund establishments by Norfund
Sector based and geographical focused funds
Established Funds Managers with proved track record
INVESTMENTS IN 2017
4
AdditionalityRisk
Capital
Investments in 2017
Managing
Monitoring
Active
Nordic Horn of
Africa Fund
INITIATIVES IN 2018
5
AdditionalityRisk
Capital
Managing
Active
Monitoring
Commercially attractive risk/return
FOOD AND AGRIBUSINESS
COMMITTED
1 528 MNOK
ASSOCIATED SMALLHOLDERS
12 000 smallholder farmers
linked with portfolio companies
LOCAL SUPPLIERS
1 200 MNOK in local
purchases in 2017
26 direct
investments
6
Nairobi, Kenya
Maputo, Mozambique
Accra, Ghana
Norfund’s regional offices
WHAT
• Investments with partners in individual companies in Southern and Eastern Africa, particularly in agribusiness
WHY
• High development effects from startup and high-risk projects
• Attract expertise and technology to LDCs in Sub-Saharan Africa
INVESTMENT STRATEGY
7
Right Partners
▪ We seek competent industrial partners and a competent management team who share investment risk▪ We strive to align investors and management with a shared game plan and milestones outlining roles and
responsibilities of the investors, board and management▪ We seek shared core values and a long term partnership
Implement Institutional
Practices
▪ Find and retain quality management team▪ Institutionalised, customised reporting▪ Improved transparency, internal controls, and financial management systems▪ Better governance rights▪ Best practices ESG monitoring
Investment Themes
▪ Focus on fastest growing agribusiness sectors: including FMCG, transportation, storage, processing,manufacturing and retail sectors
▪ Leverage on demographic and socioeconomic changes: the rapid development of the African consumer class,improving standard of living, strong urbanization trends, growing local entrepreneurship and economic growth
▪ Introduce proven business models: look for managers and portfolio companies that seek to implement globalbest practices across the agribusiness value chain
▪ Import substitution: seek to focus on sectors and products that have unmet local demand (despite Africa’sagricultural resources and 75% of the population being involved in agriculture, Africa has been a net importerof food since the 1970s)
▪ Focus on infrastructure & value chain enhancement: lack of sufficient infrastructure and logistics systemsrepresents major obstacle for many African businesses leading to enormous inefficiencies in the value chain
VALUE CREATION THROUGH ACTIVE OWNERSHIP
8
Value Creation Process
8
Value Creation Model
WE ENGAGE WITH MANAGEMENT TO DEVELOP A JOINT GAME PLAN FOR
9
A game plan presents an outline of key actions throughout the investment cycle. It allowseffective and structure way of working by breaking down and executing goals step-by-step. Akey aspect of the game plan is to get alignment between the shareholders and management.
Creating a game plan enables investors and management to:
o Reflect over what initiatives should be prioritized and at what stage of the investment
o Create transparency and alignment between the owners and management
o Monitor progress and current state of the investment
A good game plan should include:
o A well thought out vision for the investment
o Realistic and measurable initiatives in prioritized sequence
o Responsibility and ownership of the initiatives
o Start and completion date for the initiatives
o Milestones to be achieved
Why Do We Need a Game Plan?
INVESTMENTS IN 2017
10
nyamaworld
Marginpar
Group
GROWTH PLATFORMS
11
nyamaworld
Beef
Tropical Fruits
Cut Flowers
Marginpar
Group