Panorama of the Luxembourg Microfinance Investment Fund Sector

Transcription

1 Panorama of the Luxembourg Microfinance Investment Fund Sector Patrick Goodman 18th October 2005, Luxembourg 1

2 Introduction to Microfinance Investment Funds Wide variety of vehicles used to channel funding to MFIs Microfinance Investment Fund (MFIF) Specific corporate structure set up to invest in microfinance assets Investment vehicle for social or commercial investors, acting as shareholders or as lenders Neither donor institutions nor Development Finance Institutions are considered as MFIFs From initially development-oriented MFIFs to more commerciallyoriented MFIFs Distinction between total assets and microfinance portfolio Distinction between committed funds and disbursed funds 2

3 Introduction to Microfinance Investment Funds Based on studies which have recently been made (Nov. 04 and June 2005): 41 existing MFIFs with: Total assets of 981 million Total Microfinance portfolio of 542 million (disbursed) About 70% of the assets of these funds are development oriented or mainly funded by Development Finance Institutions Some duplication as some MFIFs invest in other MFIFs (eg rgmf invests 16% of its assets in other MFIFs) Very few funds truly targeted to private and institutional investors Probably up to 20 MFIFs have been set up or are being set up around the world since then 3

4 Microfinance Investment Funds in Luxembourg 4 There are currently 3 investment funds in Luxembourg which provide funding to MFIs and which are targeted to private and institutional investors Total assets of 105 million Microfinance portfolio of 70 million There is 1 SICAR which was created on 29th August 05 but with the min. capital There are another 7 investment vehicles dedicated to microfinance or development finance which will be set up in Luxembourg by the end of 2005 or the beginning of 2006 Whole spectrum of available structures in Luxembourg will be used, from traditional investment funds to SICARs and Securitisation vehicles. All the investment funds pursue a double return, social as well as financial

5 Promoter: Dexia BIL Dexia Micro-Credit Fund BlueOrchard Debt Sub-Fund Investment Managers: Dexia Asset Management and BlueOrchard Finance S.A. Part II Sicav with three capitalisation share classes: EUR, USD & CHF First commercial Microfinance Investment Fund launched (98) 2 nd largest commercial MFIF in the world (the first is a securitisation vehicle launched in the US by BlueOrchard in 2004): Total assets of 56,1 million Microfinance portfolio of 41 million Investments: mainly foreign currency denominated loans to mature MFIs (104 loans to 47 MFIs in 22 countries) Targeted investors: social private and institutional investors (Min. investment: $/ equivalent) Target return: Libor + 2% Actual return: 2004: 4,4% - Sep 2005 YTD: 2,78% (EUR) 5

6 responsability Global Microfinance Fund Promoter: Credit Suisse (joint initiative with other Swiss-based financial institutions) Investment Managers: Credit Suisse Microfinance Fund Mgt Company and responsability Social Investment Services A.G. (Use of investment advisors) Part II FCP with three share classes: EUR, USD & CHF Launched on 25th November 2003 One of the fastest growing MFIFs in the world Total assets of 30,2 million Microfinance portfolio of 27,9 million Investments: mainly foreign currency denominated loans to mature MFIs but also some local currency investments and equity investments in MFIs and other microfinance investment structures Targeted investors: social private and institutional investors (Min. investment: $/ /CHF 1,000) Target return: Libor + 1% Actual return: Aug 2005 YTD: 1,67% (EUR) 6

7 Axa World Funds Development Debt Sub-Fund Promoter and Investment Manager: AXA Investment Managers Part I SICAV with two share classes: Cap & Dis in EUR Launched on 2 nd January 2002 One of the very rare traditional investment funds investing in microfinance: Total assets of 19 million Microfinance portfolio of 1,2 million (max 10%) Investments: mainly EUR and USD denominated debt instruments issued by Development Finance Institutions (EIB, IBRD, etc.) with some CDs issued by MFIs Targeted investors: private and institutional investors Target return: European 3 year Bonds + 50 bps Actual return: 2004: 2,99% - Aug 2005 YTD: 1,66% (EUR) 7

8 La Fayette Investissement Promoter and Investment Manager: Horus Development Finance Luxembourg Venture Capital Investment Company (SICAR) based in EUR with an unlimited duration Launched on 29th August 2005 with min. capital. First Closing expected in November Target size: 14,1 million Investments: Mainly equity stakes in start-up or promising MFIs in Africa and in Asia, as a majority shareholder, but also loans and guarantees to the same MFIs. Targeted investors: Horus itself and Development Finance Institutions 8

9 Promoter: VPM, Austria Dual Return Fund Vision Microfinance Sub-Fund (Project) Investment Advisor: Symbiotics S.A. Part II SICAV with four share classes: EUR, USD, CHF and SEK File currently with CSSF. Launch expected Q4 05 or Q1 06 Investments: short to medium-term loans mainly in hard currencies to mature MFIs globally Targeted investors: essentially institutional investors (Min. investment of $/ ) Target volumes: USD 100 million in the first 12 months 9

10 Equity Fund for Southeast Europe (Project) Promoter: KfW, Frankfurt Investment Manager: under selection Part II Institutional SICAV (91 Law) with initially: One regional and four national sub-funds with first-loss shares One Regional sub-fund with second-loss shares, senior shares and notes issued Six national pools and one regional pool File currently with CSSF. Launch targeted Q4 05 with initially 200 million Objective of the Fund: Foster economic development and prosperity in the southeast Europe region through the sustainable provision of development finance notably to micro, small and medium-sized enterprises and to private households, via qualified financial institutions (Mainly but not only hard currency medium to long-term loans) Targeted investors: First-loss shares: Donor agencies and DFIs Second-loss shares: Mainly DFIs but also social institutional investors Senior shares and Notes: Mainly commercial institutional investors but also social institutional investors and DFIs 10

11 Saint-Honoré Microfinance (Project) Promoter: La Compagnie Financière Edmond de Rothschild Banque, Paris Investment Managers: Edmond de Rothschild Asset Management and BlueOrchard S.A. Part II SICAV in EUR File currently with CSSF. Launch expected Q4 05 or Q1 06 Investments: Mainly debt investments via local and regional investment structures (fund of funds) Targeted investors: private and institutional investors (Min. investment: 5,000) Target return: 3% to 4% 11

12 Other projects to be launched in 2005 or in early SICAR 2 Part II Investment Funds One other project within a structure to be determined 12

13 Panel discussion Attractiveness of Luxembourg as a domicile for MFIFs Microfinance as an attractive business, maybe initially a niche business but with multiple advantages (image, social responsibility, responding to customer needs, risk diversification, etc.) Natural attractiveness of Luxembourg in the investment funds business What more can be done for Luxembourg to act as a catalyst in the emergence of this new asset class? Creation of a Quality Label for Microfinance Investment Funds? Abolishment of the Luxembourg Tax d Abonnement for MFIFs? Tax stimulus for Luxembourg tax payers investing in MFIFs? Yearly Microfinance Investment Forum? 13

14 Patrick Goodman Consultant Luxembourg Tel: Mobile: