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Introduction to Creation Investments
This document does not constitute an offer to sell, or a solicitation of an offer to buy an interest in Creation Investments Social Ventures Fund I or Creation Investments Social Ventures Fund II (the “Funds”) described herein. No such offer or solicitation will be made prior to the delivery of an Offering Memorandum and other materials relating to the matters mentioned herein. This document contains a preliminary summary of the purpose of the Funds; this summary does not purport to be complete, is for discussion purposes only and is qualified in its entirety by reference to the more detailed discussion contained in the actual Offering Materials. No representation or warranty is made by Creation Investments, LLC or any of its affiliates or subsidiaries, including any of its agents or other representatives, or by the Funds as to the accuracy or completeness of the information contained herein. Only those particular representations and warranties which may be made in definitive agreements relating to the Funds, when, as and if executed, and subject to such limitations and restrictions as may be specified in such definitive agreements, shall have any legal effect. This document is being provided to you on a confidential basis, and upon the representation that you are an Eligible Investor. Accordingly, this document may not be reproduced in whole or in part, and may not be delivered to any person without the prior written consent of Creation Investments, LLC, Creation Investments Capital Management, LLC or the Funds. Copyright 2013.
January 2015
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§ Creation Investments is a Chicago-based private equity firm founded in 2007 – Significant equity positions in high-growth, highly-profitable financial services
businesses in core emerging markets that serve micro, small and medium businesses – Commitment to bringing capital, governance and operational expertise to build
sustainable financial institutions that contribute to economic development
§ Successfully closed Creation Investments Social Ventures Fund I (2009 vintage) – $32 million raised; fully invested
§ Successfully closed Creation Investments Social Ventures Fund II (May 2013) – $75 million raised; significant co-investment interest (additional $25+ mm co-
investment capital raised to date) – Substantial commitments from GP (10%), Institutions (Fortune 100 Bank, Insurance
Company, Hedge Funds), & Fund I investors (90% re-up) – >50% invested; sales of two portfolio companies within investment period
§ Creation also manages impact investments in Health Care, Affordable Housing, Clean Energy, and Agriculture
§ Creation partners with excellent management teams to help them Grow Assets, Build Relationships, and Pursue Strategic Opportunities
Introduction
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Patrick Fisher, CEO & Founder § JPMorgan Chase, International
Banking – Asia & Latin America § Buy-side M&A, Fund Management,
Interest Rate Derivatives, & Foreign Exchange background
§ American National Bank, Credit Underwriting
§ MBA, Kellogg/Northwestern; BA, University of Notre Dame, magna cum laude
Experience in Financial Services, Emerging Markets, Private Equity and Microfinance
Investment Team
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Bryan Wagner, Director § Morgan Stanley Latin America
Investment Banking § Federal Reserve Bank of New York,
Emerging Markets Division § Microfinance field experience with
ACCION International § MBA, Harvard Business School;
MPA-ID, Harvard Kennedy School; BSBA, UNC-Chapel Hill
Ken Vander Weele, CIO § 20+ Years in Microfinance § Opportunity International
§ President Investment Services § Head of Investment Banking § MFI board member § CEO of several MFIs
§ Grew OI assets from $5 mil to $1.5+ bil § Deep industry relationships § CPA; Ph.D., Oxford’s Open Program
Adam Code, Vice President § MBA, Kellogg/Northwestern;
BA University of Colorado at Boulder § William Blair, Investment Banking
Operating Partners § Full Biographies upon request Support Staff § Full Biographies upon request
Tyler Day, Senior Associate § Houlihan Lokey, Investment Banking § Technical & Finance Advisor, Five Talents
MFI Uganda § BBA, University of Texas
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Creation Funds Portfolio & Pipeline
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Pending
Pipeline
Sonata Finance
Creation’s team has reviewed 250+ deals in 50 countries Complete
Mexico
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§ $3-$30 million per transaction § Equity (preferred and common stock)
– Significant equity positions – Board seats, customary
shareholder rights
Creation Investments Private Equity Focus
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Investment Characteristics Transaction Characteristics
§ Growth equity – Expansion of geographic and
product reach – First institutional equity partner
§ Buyout – Early investors seeking liquidity – NGO/social founder divestitures
in mature markets
§ Financial services to the under banked § Located in core emerging markets § Excellent management team and
company culture § Scalable business model and landscape § Strong underwriting and risk
management § High borrowing capacity
Target Company Characteristics
§ Capitalize and support high-potential, high-growth institutions
§ Track record of organic growth and growth through M&A
§ Build value through active involvement – Supporting local management – Instituting best practices in
underwriting, audit, and systems – Optimizing capital structure
Investment Thesis
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§ We are building the next generation of top-tier Financial Services Providers for the Bottom of the Economic Pyramid
§ We are pushing beyond traditional brick-and-mortar MFIs, building a strong financial services industry with high standards of excellence & ethics
§ We add Operational Value, Secure Debt, & Support Strategic M&A
Status of Our Funds
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§ 4,594,154 Clients § 5.3 Mil Jobs Sustained § 19.0 Mil Individuals Affected § 12,957 Staff § 71.4% Women Clients
§ $1.16 Bil Loan Portfolio § $265 Avg. Outstanding Loan Size § $257 Mil Deposits § $1+ Bil Remittances Processed § 4.0x Debt / Equity § 2.66% PAR > 30 days
Note: Fund I & II Combined. Data as of June 30, 2014.
FINANCIAL METRICS GEOGRAPHIC CONCENTRATIONS SOCIAL PERFORMANCE 5.0%
20.4%
19.3% 55.3%
North America Latin America
Eastern Europe Asia
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Select Funding Relationships
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A recognized industry leader in financial performance & social reporting (IRIS/GIIRS)
Named Top Impact Investment Fund Manger in 2011
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CREATION INVESTMENTSSOCIAL VENTURE FUNDS
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Portfolio Company Overview
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Company Type Core Investment Company; NBFC Subsidiaries
Lending Type 59% micro; 36% vehicle; 5% housing
Gross Loan Portfolio $474 million
# of Active Clients 1,953,196
# of Staff 5,073
PAR >30 0.08%
Loan Size $200-$300 micro; $5,000-$35,000 vehicle; $4,000-$30,000 housing
Original Investment Date: May 2014 Type of Investment: Growth Equity and Buyout Investment Amount: US $0.7mm invested and $5.5mm total commitment as part of first investment; additional $20.2mm pending follow-on investment
10 Note: Data as of June 30, 2014.
Headquarters: Chennai, India
§ Diversified product base across 9 states § Capital deployed to fund expansion of core microfinance
portfolio and growth of newer product lines (vehicle, housing and SME)
§ Powerful technology as the backbone of growth and scale § Strong and capable management team § Recognized as the most ‘Fair and Transparent’ organization § Planned path to IPO supported by a broad ownership base,
strong governance and several successful capital raises
A top 5 MFI in India, with growing diversification into vehicle and housing segments
Equitas – India Fund II
KEY INVESTMENT TERMS
INVESTMENT THESIS
SUMMARY STATISTICS (IN USD)
LOCATIONS & MAP
Equitas Holdings Pvt. Ltd.
Equitas Microfinance Equitas Finance Equitas Housing
Finance
100% Subsidiaries
Total Branches in Jun ‘14 = 458
(As of 31-Mar-14)
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Original Investment Date: March 2014 Type of Investment: Growth Equity (25% ownership) Investment Amount: US $5.7mm invested; US $11.9mm committed; US $17.0 total raised incl. co-investors
11 Note: Data as of June 30, 2014.
Headquarters: Kandy, Sri Lanka Branches: 95
§ Organic portfolio growth of 35% in first six months § With Creation’s help acquired Trade Finance, a leasing and
hire purchase company that provides loans for two and three wheelers
§ Upgraded credit rating to investment grade by S&P’s affiliate in Sri Lanka
§ Received term sheet for a syndicated loan agreement from a group of international microfinance debt providers
§ Developed Investor Relations Department
Leading regulated, deposit taking finance company in Sri Lanka
Commercial Credit – Sri Lanka Fund II
KEY INVESTMENT TERMS
SINCE CREATION’S INVESTMENT
SUMMARY STATISTICS (IN USD)
MAP OF SRI LANKA
Company Type Deposit taking finance company
Lending Type 37% micro (group); 36% vehicle; 27% SME & other
Gross Loan Portfolio $217 million
# of Active Loans 324,438
# of Staff 1,946
Loan Size $75-$1,500 micro; $5,000-$60,000 vehicle; $1,000-$40,000 SME & other
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– Mexico
Original Investment Date: May 2012 Type of Investment: Growth Equity and Buyout Investment Amount: Fund I: US $4.2 million; Fund II: US $6.4 million (total = $10.6 million)
12 Note: Data as of June 30, 2014.
§ Started with a failed MFI and turned it into a platform investment to use in consolidation strategy
– CrediComún, Aspire, MicroCred Mexico, Se Más, Apoyo § Hired experienced and successful local management team § Building scale in a highly-fragmented market, became a top
12 MFI in only 2 years § Creating value through innovation in a commoditized market
A Top 12 (and Climbing!) MFI Achieving Scale in a Highly Fragmented Market
Company Type SOFOM (non-banking finance company)
Lending Type 80% Group; 20% Individual
Gross Loan Portfolio $29.4 million
# of Active Clients 73,831
# of Staff 696
PAR >30 7.2%
Average Loan Size $391
Fund I & Fund II
KEY INVESTMENT TERMS
SINCE CREATION’S INVESTMENT
SUMMARY STATISTICS (IN USD)
BRANCH PRESENCE
BUILDING SCALE IN A HIGHLY FRAGMENTED MARKET
53 branches 13 states
Grupo Ranking by Portfolio
March 2013 June 2013 Sept 2013 Dec 2013 TODAY
$30 MM
Market Statistics Top 5 = $101 MM Top 10 = $46 MM Top 15 = $23 MM Top 40 = $16 MM
#20 #19 #19 #17
#12
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Original Investment Date: February 2010 Type of Investment: Growth Equity and Buyout Investment Amount: US $12.3 million
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§ Set up holding company platform to consolidate highly-fragmented SME / MFI market in Eastern Europe
§ Turned three struggling financial institutions/banks into leading micro and small business lenders
§ Hired best-in-class HoldCo management team to drive turnaround: upgraded the local teams and culture, kick-started organic growth, tightened risk controls, improved collections, improved performance measurement, and secured funding
Building a strong brand and platform in Eastern Europe
– Eastern Europe Holdings Fund I
KEY INVESTMENT TERMS
SINCE CREATION’S INVESTMENT
SUMMARY STATISTICS (IN USD)
LOCATIONS & MAP
Note: Data as of June 30, 2014.
Headquarters: Amsterdam, The Netherlands Branches: 72 total (18 in Albania, 12 in Poland, 42 in Russia)
Company Type Bank (Russia); NBFC (Poland & Albania)
Lending Type Individual
Gross Loan Portfolio $133 million
# of Active Clients 27,391
# of Staff 739
PAR >30 5.7%
Avg. Loan Size $3,984
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§ Deployed capital to increase distribution points and develop additional products
§ More than doubled its number of Customer Service Points (CSPs)
§ Increased monthly remittance transactions sevenfold § Created innovative, universal PIN technology to provide
secure transactions over any type of phone § Empowers the unbanked in India, allowing them to become
part of the financial industry in a secure, easy and economical way
- India
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Original Investment Date: June 2011 Type of Investment: Growth Equity and Buyout Investment Amount: US $3.75 million
Headquarters: New Delhi, India Branches: NCR, Bihar, Jharkhand, Punjab (Amritsar, Ludhiana), Haryana (Sonipat, Panipat, Murthal), Rajasthan (Jaipur), Himachal Pradesh (Baddi), Andhra Pradesh (Hyderabad), Maharashtra (Mumbai)
Fund I
KEY INVESTMENT TERMS
SINCE CREATION’S INVESTMENT
SUMMARY STATISTICS (IN USD)
LOCATIONS & MAP
Innovative agent banking model
Company Type Banking Correspondent
# of Staff 43
# Active Accounts 232,904
LTM Remittances US $234M in 3.0M transactions
Avg. Transaction Size $83
# of CSPs 2,987
Note: Data as of June 30, 2014.
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Contact Us
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Contact Information
30 South Wacker Drive, Suite 1600 Chicago, IL 60606
Patrick Fisher Chief Executive Officer & Founder +1.312.784.3980 [email protected]
Ken Vander Weele Chief Investment Officer +1.312.784.3979 [email protected]
Bryan Wagner Director +1.312.784.3978 [email protected]
Adam Code Vice President +1.312.662.5495 [email protected]
Tyler Day Senior Associate +1.312.662.5490 [email protected]
Lynn Currie Controller +1.312.784.3988 [email protected]
