DDF Asset Allocation Netværk

Transcription

1 DDF Asset Allocation Netværk Alternative investments in IFU 14. marts

2 Yours truly 2012 present: IFU : Danske Bank Chief strategist Danske Bank Private Banking Head of asset allocation and products Group Wealth Management Senior Account Manager Merchant Bank Senior Project Manager, Group Development : Realkredit Danmark Vice president Markets : Unibank Securities Senior Analyst Structured Finance : cand.polit 2003: executive MBA, CBS PAGE 2

3 Agenda IFU in brief Investment vehicles AI in emerging markets: Opportunities and challenges Mitigation of challenges IFU s additionality The political footprint PAGE 3

4 IFU raison d etre Our purpose is to promote economic activity in developing countries by investing with Danish companies and institutional investors We operate on commercial terms, expect equity return of above 10% We act as minority stakeholder in project companies via equity investments and loan financing Environmentally and socially sustainable investments are key to IFU PAGE 4

5 IFU what we do and don t do What we DO Provide risk capital on commercial terms we expect our money back What we DON T do Provide aid or grants Serve as active Board members Provide active day to day management of project Provide sparring and advice in developing the project Develop or fund feasibility studies Invest together with Danish companies abroad Invest with Danes without a commercial activity in Denmark PAGE 5

6 IFU: the leading emerging market investment organisation in Denmark 46 Year heritage 800 Investments 500+ Danish Partners 85 countries DKK 9bn invested 7 offices Others 7% Cairo Beijing New Delhi 250 Active investments 35 Investment professionals 38 Advisors PAGE 6 Latin America 14% IFU Offices Accra Nairobi Johannesburg Headquarters: Denmark; Regional offices: Cairo, China, India, Kenya, South Africa and Ghana Countries where IFU currently operates Countries where AIF currently operates Africa 33% Asia 46% 13 Consecutive years of positive results 13% 10 year net IRR (SC)

7 IFU s DNA three ingredients for value creation Excellent deal sourcing Protection of investment through hands-on involvement during preparation and implementation PAGE 7

8 Financing an overview of IFU s terms Amount Maximum of DKK 100 millions per project, though - Max. 30% of total financing for projects (higher for smaller projects) - Max. matching the Danish Partner(s) Equity Loans secured or unsecured Duration 5-8 years 5-7 years in $, EUR, DKK Exit Put/call agreement with the Danish partner at market value Repayment, 1-2 years grace Exit agreement from the start PAGE 8

9 PAGE 9 Emphasis on CSR

10 IFU s financial performance compares favourably with emerging market benchmarks 10 year net IRR of 13% * Source: Bloomberg, dividends reinvested PAGE 10

11 Examples of IFU s Danish partners PAGE 11

12 Ennova, 2012: 9/10 Danish Partners would recommend IFU How likely is it that you will make use of IFU the next time your company needs an investment partner in developing countries? Would you recommend IFU to others in your network? Image: 88% Trustworthy and reliable: 90% PAGE 12

13 Agenda IFU in brief Investment vehicles AI in emerging markets: Opportunities and challenges Mitigation of challenges IFU additionality The political footprint PAGE 13

14 Numerous vehicles: tailored solutions, broader scope, more deals and higher participation rate. IFU as fund manager IFU classic (1967) IFU Investment Partners with PBU and PKA (2012) AIF (2011) Climate Fund (2012) IØ ( ) IFU as lead consultant Mikrofinansieringsfonden (managed by Maj Invest) IFU as participant in syndicates EDFI IFC PAGE 14

15 Agenda IFU in brief Investment vehicles AI in emerging markets: Opportunities and challenges Mitigation of challenges IFU additionality The political footprint PAGE 15

16 PAGE 16 Favourable macroeconomic environment

17 but not all is positive Corruption, political environment & terrorism Tunisia stabilised, Egypt still uncertain Boko Haram in Northern Nigeria, Al Shabab in East Africa Mali Kenya Tribal based conflicts SA short-term: wildcat strikes & contagion + Moody s downgrade & decision not to renew EU treaties Poor infrastructure Characterized by low overall population density (36 people per square kilometre) Low rates of urbanization (35 per cent), but relatively rapid rates of urban growth (3.6 per cent a year) Large number of landlocked countries (15) Numerous small economies Particularly high hydrological variabilityhuge swings in precipitation across areas, seasons & time, which climate change is likely to exacerbate PAGE 17

18 Typical challenges when investing in EM Frequent changes of rules and regulation Deviation between rules and implementation Finding competent and English-speaking midlevel managers at a reasonable salary level and keeping them IP-issues Corruption Local loan financing Customer mind set Culture PAGE 18

19 Agenda IFU in brief Investment vehicles AI in emerging markets: Opportunities and challenges Mitigation of challenges IFU additionality The political footprint PAGE 19

20 How we help mitigate risk Involvement from idea to self sustained investment Organisation Experiences and skills Dedication through risk sharing PAGE 20

21 IFU S Additionality Bridging - Culture - Mentality - Management Board work and management advice Contacts to the authorities Recruitment PAGE 21 14/03/2013 Event: Add event via 'View' / 'Header & Footer'. Max one line

22 Case Africa: Solid IFU footprint 43 Year heritage 234 Investments 14 Investments in Active investments 36 countries 4 offices DKK 3,1bn IFU invested 14 Investment Professionals DKK 48bn Totally invested 5 Advisors 41,600 Jobs created PAGE 22

23 Case Africa: Dedicated teams and regional offices West Africa East Africa Southern Africa Northern Africa PAGE 23

24 DOs and DON Ts Pursue a long term strategy It takes longer and costs more than you can imagine (deep pockets and patience) Extensive due diligence (regulatory issues, markets, local partners) is needed Professional management team (training support from DK) Cultural integration Get good local advise from the very beginning Rampant corruption in judicial systems apply a consistent corruption approach Do not behave like the locals PAGE 24

25 Agenda IFU in brief Investment vehicles AI in emerging markets: Opportunities and challenges Mitigation of challenges IFU additionality The political footprint PAGE 25

26 Is it challenging to have involvement from government? Investment scope Countries eligible for IFU investments Part of a political strategy Preferred regions Company size Partner perception A flavour of grants? NO! Price tag not fair to require ROE on commercial terms PAGE 26

27 not really, positives clearly outweigh limitations Deal sourcing Access to EM-authorities Political blue stamp Anti corruption Capital Discipline PAGE 27