23.01.2012 | SEIIF - Oxfam and Symbiotics target investment industry with new SME fund
SEIIF - Oxfam and Symbiotics target investment industry with new SME fund
Oxfam is taking a lead in demonstrating to the financial
industry that investments can deliver both social and financial
returns, with the creation of a unique investment fund.
The Small Enterprise Impact Investment Fund (SEIIF) is a
joint initiative between Oxfam and asset management group,
Symbiotics. The first fund of its kind, the SEIIF will target
small and medium enterprises (SMEs) in developing countries,
offering investors both measurable social impacts and financial
returns, with relatively low risk. Investors are now being
sought for the fund.
"The private sector has a critical role to play in lifting people
out of poverty and has the potential to drive huge SME growth in
developing countries at a scale that is simply not possible for
traditional development finance institutions to achieve on their
own," says Barbara Stocking, chief executive of
Oxfam.
Known as the 'missing middle', Oxfam says that there are huge
numbers of small businesses in Africa and Asia stifled by
underfunding and limited access to credit, despite being recognized
as a critical engine of growth in many economies. This sector
is not being met by the existing microfinance asset class, the
SEIIF will target this financing gap by investing in a variety of
local financial intermediaries which focus on small enterprise
development.
In its role as 'impact adviser' for the fund, Oxfam will use its
local knowledge and development experience to offer independent
intelligence on the impact of investee activities. Its
primary focus will be activities which build women's empowerment,
job creation and food security in low income economies. The
fund aims to directly create 100,000 good quality jobs in its first
five years.
"Impact investing is still a relatively new concept for both
financial markets and the development community. Oxfam has
long talked about the role the investment industry could play in
poverty eradication, but now we've decided to prove it. As
well as providing capital to an under-served market, the SEIIF's
biggest job will be demonstrating success and leading the way for a
new wave of impact investment centered on SMEs in developing
economies - helping them become an asset class in their own right,"
continues Stocking.
The target size of the SEIIF is $100 million after three years,
which will be invested in a portfolio of debt and equity
instruments, targeting those with low risk, high impact
profiles. The fund will target capital preservation and yield
a realistic return for investors.
"The SEIIF seeks low risk through high diversification and clear
exits, which offers investors both breadth and diversity in terms
of models, geographies and activities," says Roland
Dominicé, chief executive of Symbiotics.
Gavin Stewart, previously Chief Executive of Resolution
Asset Management and Ignis Asset Management and a SEIIF investment
committee member, says: "This is an innovative and
exciting way to bring together the private sector skills of a
specialist player and the knowledge and experience of Oxfam in the
impact space. The long term potential benefit from proving
that you can invest successfully in this area is massive and I look
forward to helping this new fund be a success."
Stephen Acheson, Director, Standard Life Investments,
says: "One of the greatest obstacles facing entrepreneurs
and small businesses anywhere in the world is access to funding.
This problem is particularly acute in developing countries. I
believe that this new fund, SEIIF, has the ability to assist many
embryonic and small businesses and in doing so generate wealth,
employment and economic growth in areas where business potential
has historically been constrained due to a lack of affordable
capital."
A significant proportion of SMEs targeted by the SEIIF will be in
the vital agricultural and food sectors. Around 500 million
small farms in developing countries support almost two billion
people worldwide and women produce a large proportion of the
world's food by contributing to this agricultural production.
According to the Food and Agriculture Organization (FAO), if these
women had equal access to farming resources they could see an
increase in harvests that could reduce the number of hungry people
in the world by 100-150 million. The FAO says that investing
in women farmers could raise total agricultural output in
developing countries by 2.5 to 4 per cent.
Notes to editor
Fund Manager: Symbiotics Group
A pioneer team in impact investments, Symbiotics' mission is to
reach out through investments, financing small enterprise
development and the social economy.
Impact Adviser: Oxfam GB
Oxfam is one of the world's most respected global development
agencies. The organization delivers local presence and knowledge,
as well as strong experience and expertise in impact criteria and
measurement.
For further information or interviews, please
contact:
Oxfam Press Office
Leona Everitt
+44 (0)1865 472237 / +44 (0)7827 957337
leveritt@oxfam.org.uk
www.oxfam.org.uk
Symbiotics Group
Claire Dorey, Communication Officer
+ 41 (0)22 338 15 40
claire.dorey@symbioticsgroup.com