IMPACT INVESTMENT Presented by : Quyen Duong
August 2013
INTRODUCTION •
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Long Lo nges estt esta establ blis ishe hed d asse assett mana manage gerr in Indoc Indochi hina na •
Acti Active ve sinc since e 1994 1994
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Tota Totall asse ssets unde underr mana anageme gement nt grown rown from from $17m $17mn n to $1bn $1bn at pre present sent
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Inve Invest sted ed in more more than than 130 130 co comp mpan anie iess
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Comp Co mple lete ted d 51 priv privat ate e eq equi uity ty exit exitss thro throug ugh h diff differ eren entt rout routes es
The only fund manager in the region that has made investments in Vietnam, Camb Cambod odia ia,, and and Laos Laos Reco Recogn gnis ised ed resp respon onsi sibl ble e inve invest stor or – shortlisted in the category “Sustainable Investor of the Year” for the FT/IFC Sustainable Finance Awards in two cons co nsec ecut utiv ive e ye year arss 2011 2011 and and 2012 2012 Solid platform of more than 40 experienced investment professionals, 4 inhous house e lega legall co coun unse sels ls and and fu full ll-s -sca cale le back back of offi fice ce oper operat atio ion n
CASE STUDIES VINAMILK
PRASAC
Sector: Food & Beverage
Sector: Financial Services
Investment date: Oct 2003
Investment date: Dec 2006
Performance: Overall return is 35.6% IRR and 3x multiple. Partial exit tranche yielded 39% IRR and 5x multiple
Performance: 5x multiple
Background:
Background:
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Vinamilk is Vietnam’s largest diary company and currently the 2nd biggest non-financial on VNI with market cap of $2.4bn Strong market leader position with largest distribution network of dairy products in Vietnam Sales CAGR of 35% and net profit CAGR of 45% from 2007-2011
BOP Impact: •
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Employment generation and inclusion of poor farmers in dairy supply chain as a result of raw material initiative Nutrition and health impact from increased milk consumption
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offices in 24 provinces, focused on rural communities and micro-enterprises •
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From 2004-2010, loan portfolio increased 12.5 times. Yet portfolio at risk above 90 days stays at less than 1% Net profit CAGR of more than 20% during 2007-2010, with net earnings of US$3.4m in 2010
BOP Impact: •
Cambodia’s Cambodia’s largest microfinance institution, with 154
offices in 24 provinces, focused on rural communities and micro-enterprises •
Active measure in environment and energy conservation Active CSR program to improve social well-being of the
Cambodia’s Cambodia’s largest microfinance institution, with 154
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From 2004-2010, loan portfolio increased 12.5 times. Yet portfolio at risk above 90 days stays at less than 1% Net profit CAGR of more than 20% during 2007-2010, with net earnings of US$3.4m in 2010
IMPACT INVESTMENT MARKET The market at the base of pyramid is untapped and offers profound investment opport opportuni unitie tiess for invest investors ors Poverty Line at $2 a day
Country
Population Share
Populat io ion
Purchasing Power
Accumulated Purchasing Power
%
million
US$ million
US$ million
Vietnam*
43.4
36.9
31,654
39,340
Lao PDR*
65.9
4.0
48,125
63,581
Cambodia*
53.2
7.4
38,870
49,234
4.6
3.2
3,368
3,535
51. 4
122,017
245,007
Thailand Tota l
at $4 a day
Vietnam*
83.1
70.8
121,349
213,763
Lao PDR*
92.5
5.6
135,041
269,841
Cambodia*
87.4
12.1
127,594
238,287
Thailand
36.0
24.6
52,632
66,433
113. 0
436,616
1,264,848
Tota l
Source: Worldbank Worldbank databank, as end of 2009, except * as end of 2008.
BUSINESS SECTORS AND IMPACT OBJECTIVES Deal Deal sourci sourcing: ng: •
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Select business sectors with opportunities for BOP impact then select appro appropr pria iate te co comp mpan anie iess wi with thin in such such sect sectors ors Select an impact objective then build appropriate projects together with target target compan companies ies •
Agriculture
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Healthcare
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Pharmaceuticals
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Financial Services
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Education
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Energy
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Health improvement
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Water
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Supply chain improvement
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Employment generation
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Income growth
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Productivity improvement
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Access to products and services
CHALLENGES AND PROPOSED SOLUTIONS
CHALLENGES •
PROPOSED SOLUTIONS •
Work with established companies
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Localise Localise investment investment team team
Sustainability •
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Scalability •
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High cost
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Financial returns vs. social returns
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Impact measurement •
Proper due diligence by experienced professionals Intensive post-investment monitoring Grant-sponsored technical assistance facility Manage investors’ expectation
Impact Reporting and Investment Standards Unconventional partnership of multiple stakeholders: fund managers, DFIs, NGOs, government agencies
THANK YOU
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