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INVESTMENTS FOR DEVELOPMENT - SWISS INNOVATION FOR A SUSTAINABLE
WORLD
TBLI CONFERENCE ZURICH
20. November 2015
SIFEM – SWISS INVESTMENT FUND FOR EMERGING MARKETS
• SIFEM is the Swiss Development Finance Institution (DFI) − Instrument of Switzerland’s public development cooperation − Invests via PE funds and financial institutions in emerging markets and
transitioning economies with a view to provide SMEs and fast growing companies with long-term growth capital
− Focus on partner countries of the Swiss Agency for Development Cooperation as well as the Division for Economic Cooperation and Development within SECO
− Asset base of USD 600m − Within the scope of the Strategic Objectives fixed by the Swiss Government,
SIFEM’s Board of Directors determines the investment strategy and is supervising its operations
− Managed by Obviam, a Switzerland based investment advisor
2
HOW SIFEM WORKS
3
SIFEM
Regional/Local PE Funds
Financial Institutions SME Banks Microfinance Banks
Company 1 Company 2 Company 3 Company 1 Company 2 Company 3
Equity Debt
100% owned by Swiss Confederation
OBVIAM SIFEM BoD SIFEM IC
Manager of SIFEM
SIFEM’S APPROACH TO RESPONSIBLE INVESTMENT
• Obviam applies its Responsible Investment Policy to all SIFEM investments: − Responsible Investment Policy
(Rationale, scope and objectives of responsible investing)
− Exclusion List − Obivam’s ESG Requirements:
describing on how ESG is fully integrated into the investment process (investment decision making, execution, exit)
4
DEVELOPMENT IMPACT MEASUREMENT
−Art or science? −What is impact?
−Challenge of measuring
−Comparable data?
−Cost vs. benefit −Communication
−Harmonisation
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• Obviam uses a combination of quantitative and qualitative indicators − DEG’s GPR is applied to all of
SIFEM’s investment since 2005 − Since 2013: tracking of a set of
additional quantitative indicators (sub-set of the harmonised indicators)
− Qualitative case studies to make positive impact visible that is not captured by the more quantitative indicators/tools
• Nunc viverra imperdiet enim.
SIFEM – GUIDING PRINCIPLES & THEMES
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subsidiarity leveragerisk sharing
Risk/return
additionality
counter-cyclical
impact
ESG
exclusion list
innovation
active ownership
sustainability
profit
LEVERAGE - SIFEM PPP OPPORTUNITY
• «Leverage» is one of the four guiding principles of SIFEM’s mandate: “SIFEM will mobilise optimum additional capital from other private and institutional investors for the target countries or the beneficiary companies.”
• Broad range of different investments in the SIFEM portfolio (not all investments contribute evenly to all of SIFEM’s strategic objectives)
• SIFEM’s portolio as a whole not really attractive to private investors • Different private investors are interested in different parts of SIFEM’s
portfolio – not one size fits all • Investor interest driven by risk appetite, investment objectives, return
expectations, geographic focus ... Hence tailored approach needed in order to achieve «leverage»
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LEVERAGE - OBVIAM’S INSTITUTIONAL MANDATES
8
1998 2005 2007 2012 2013
Managed Account B
Managed Account A
2015
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Job creation is a key objective of SIFEM
SIFEM invests in sector specific funds
SIFEM adheres to stringent ESG standards
SIFEM and Sustainable Development Goals
QUESTIONS?
10
Thank you