gp investors report | q3 | 2014
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1994 - 2014IMPACT
Social Investment Funds
INVESTORS REPORTThird Quarter 2014 | July 1 - Sept. 30, 2014
www.globalpartnerships.org
1932 First Avenue, Suite 400 | Seattle, WA 98101, USA | 206.652.8773 // De Enitel Villa Fontana 2c. Este, 30v. Norte | Edificio Opus Of. 205 | Managua, Nicaragua
Photo: In a rural community outside of Teustepe,
Nicaragua, Dennis (center), a credit officer with MiCredito,
a GP and Tecnosol partner, talks with potential customers
about the benefits of solar lights. The yellow solar light is
a SunKing Pro which has phone charging capabilities and
variable light settings. Photo © Global Partnerships.
For more information, contact:
Jason Henning, VP, Investor and Donor Relations
[email protected] | 206.456.7832
Featuring: Tecnosol on p.3
Now Online: Your financial statements
| Letter from the CIOO |
12 COUNTRIESwhere Global Partnerships has worked
74 PARTNERSwith whom Global Partnerships has worked
2.80 MILLION LIVES TOUCHED (an estimate number of lives touched as a result of GP’s contribution to the meaningful opportunities delivered by partner organizations)
$141.6 MILLIONcumulative capital deployed
Global Partnerships | Q3 2014 | As of Sept. 30, 2014 | Page 2
BY THE NUMBERS
November 14, 2014
Dear Investor,
Back in 2005, Global Partnerships (GP) formed its first investment fund as a way to increase the amount of capital we had available for our microfinance partners in Central America. We recognized that while philanthropy played a critical role in testing and proving emerging, innovative models to reach underserved households, impact-led investment capital was required to scale models that worked (watch our President & CEO Rick Beckett speak in-depth about this in his recent interview with Forbes, and also read his interviews with Humanosphere and GlobalWA).
Since that time we have formed five funds and deployed over $130 million to a broad range of social enterprises throughout Latin America and the Caribbean. Last month marked the full repayment of Microfinance Fund 2008 (MFF 2008), with $18.5 million repaid to debt investors on time and in full (following in the steps of Microfinance Fund 2005 and Microfinance Fund 2006, which also repaid all investors as planned).
Below are a few highlights from MFF 2008:
• Forty three investors participated in MFF 2008, including individuals, foundations, religious institutions, and development finance institutions.
• MFF 2008 extended nearly $45 million in loan capital to 23 partners over the six year life of the fund; all of our partners in turn paid their loans as agreed.
• Global Partnerships contributed the fund’s catalytic first-loss capital tranche and recovered the entire investment; this return of capital will be used to fund our organization’s strategic expansion.
• MFF 2008 led to geographic growth for GP, bringing partners from Mexico and Ecuador into our portfolio. MFF 2008 invested in eight Latin American countries in total.
• Investors in MFF 2008 were repaid targeted interest and principal for 25 consecutive quarters.
• MFF 2008 was the first GP fund to intentionally seek out partners that integrated credit with essential non-financial services such as preventive health education, extension services for smallholder farmers and business education for microcredit borrowers.
• Most importantly, through MFF 2008 Global Partnerships has touched 900,000 lives and brought meaningful opportunity to remote and underserved households throughout the region.
We continue to manage Social Investment Fund 2010 and Social Investment Fund 5.0, whose performances remain strong. Our fund performance and ongoing commitment to our mission have contributed to our inclusion on the 2014 ImpactAssets 50 (IA 50) list, which was announced in October. This marks our fourth consecutive year on the IA 50, a public database of private debt and equity impact investment fund managers selected by a committee of industry leaders and experts. Thank you for making our work possible.
Mark Coffey Chief Investment and Operating Officer
Over 6 million people in Central America lack access to electricity.
Countries: Nicaragua, Panama, Honduras, El SalvadorYear Founded: 1998
Number of Employees: 96 Systems Sold Since Inception: 60,000 Average Cost Per Product: $450 Percent of Rural/Off-Grid Clients: 90%
| Featured Partner: Tecnosol |
Global Partnerships | Q3 2014 | As of Sept. 30, 2014 | Page 3
WHO Tecnosol is one of the largest solar com-panies in Central America and has sold roughly 60,000 solar home systems since inception. The majority of their sales are large solar home systems (50W+) sold to off-grid, low income households. Their distribution and sales network includes partnerships with microfinance institu-tions and youth entrepreneurs trained as solar microresellers/maintenance staff.
WHAT Tecnosol has strong brand recognition in Central America, and a reputation for offering high quality solar products. They consult with clients on the most appropriate solar solution given their energy needs, send installation technicians, and offer warranties on all components. Recently, Tecnosol began importing smaller solar solutions (3-6W) that are designed to meet energy needs at the base of the pyramid. These products typically have phone charging capabilities and variable light settings. GP’s investment in Tecnosol creates incentives to invest in the commercialization of small solar solutions, and is intended to increase the supply of solar lights in Central America.
WHY The typical off-grid household in Nicaragua uses kerosene for lighting. Kerosene produces poor quality light, causes respiratory illnesses, pollutes the environment, and is an increasingly expensive solution. Solar lights are far more convenient, offer better light, cause no health problems, and save families money over time. While there are several options for off-grid residents that can purchase large home systems, few distribution companies offer small solar products that are affordable for families living on less than $2/day. We aim to use GP investment capital to get more products into major distribution channels, like Tecnosol’s, that reach the rural households that need them.
In a rural community outside of Teustepe, Nicaragua, Dennis (center), a credit officer with MiCredito, a GP and Tecnosol partner, talks with potential customers about the benefits of solar lights. The yellow solar light is a SunKing Pro which has phone charging capabilities and variable light settings. Photo © Global Partnerships. Click to see all partner profiles online
| Social Investment Fund 2010 |
Global Partnerships | Q3 2014 | As of Sept. 30, 2014 | Page 4
Fund Manager’s Comments
The fund disbursed four loans and renewed two credits, for a total of just over $3 million of loan activity during the third quarter. With the planned amortization payments received during the quarter, overall fund balances remain fairly level. The fund has a robust pipeline and we anticipate the fourth quarter will be very active for fund disbursements and renewals. All principal and interest payments continued to be made on time. The fund manager has scheduled and will continue to schedule loan maturities for the repayments of capital to investors in one year (October 2015) and at the maturity of the fund in June 2016.
October 21, 2010Inception Date
$22,089,312 Capital Invested
$25,000,000Total Fund Capital
34 $955
76%
53%
724,900
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
Lives touched (an estimate number of lives touched as a result of SIF 2010’s contribution to the meaningful opportunities delivered by partner organizations)
Social Impact
In thousandsTOTAL BORROWERS SERVED
0200400600800
1000
FY11 FY12 FY13 FY14
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
90
120
150
FY11 FY12 FY13 FY14
Loans past due greater than 30 days as a %AVERAGE PAR >30
0
2
4
6
FY11 FY12 FY13 FY14
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY11 FY12 FY13 FY14
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
FY11 FY12 FY13 FY140
200400600800
1000
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
| Social Investment Fund 5.0 |
Global Partnerships | Q3 2014 | As of Sept. 30, 2014 | Page 5
Fund Manager’s Comments
During the third quarter, the fund disbursed $5.3 million to seven partners. One of those, Tecnosolución (Tecnosol), is a solar light distributor whose sales primarily reach off-grid households in rural areas of Nicaragua, El Salvador, Honduras and Panama. They are a new partner for GP and their work is featured in this Investors Report on page 3. The fund is continuing to accept new commitments from investors and will call additional capital during the 4th quarter as we maintain a high-level of disbursement activity. Meanwhile, all partners have made payments as agreed and all partners are aligned with one or more of GP’s impact areas.
March 25, 2013Inception Date
$24,484,453Capital Invested
$26,232,612Total Fund Capital
20 $1,075
70%
44%
178,500
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
Social Impact
Lives touched (an estimate number of lives touched as a result of SIF 5.0’s contribution to the meaningful op-portunities delivered by partner organizations)
In thousandsTOTAL BORROWERS SERVED
0120240360480600
FY13 FY14
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
0
120
240
360
480
600
FY13 FY14
90
120
150
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
FY13 FY14
AVERAGE PAR >30Loans past due greater than 30 days as a %
0
2
4
6
8
10
FY13 FY14
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY13 FY14
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
25% Bolivia
8% Mexico
12% Peru
3% Cash
1% CentralAmerica
2% Honduras
13% Nicaragua
4% El Salvador
8% Guatemala
3% Colombia
22% Ecuador
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q3 2014 | As of Sept. 30, 2014 | Page 6
| |
Social Investment Fund 2010Percent of investable assets
BOLIVIA (25%)Emprender (6%)FONDECO (4%)Idepro (8%)PRO RURAL (3%)Sembrar Sartawi (4%)
CENTRAL AMERICA (1%)Tecnosol (1%) NEW
COLOMBIA (3%)Fundación Amanecer (3%)
ECUADOR (22%)Banco D-MIRO (8%)ESPOIR (6%)FODEMI (4%)
Fundación Alternativa (4%)
EL SALVADOR (4%)CrediCampo (4%)
GUATEMALA (8%)Fundea (8%)
HONDURAS (2%)COMIXMUL (2%)
MEXICO (8%)Pro Mujer Mexico (8%)
NICARAGUA (13%)FDL (3%)Fundenuse (2%)
Pro Mujer in Nicaragua (8%)
PERU (12%) Cenfrocafe (4%)
Pro Mujer in Peru (8%)
CASH (3%)
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (20%)Crecer (4%)EMPRENDER (3%) FONDECO (2%)IDEPRO (6%)Pro Rural (1%)Sembrar Sartawi (4%)
COLOMBIA (4%)Contactar (3%)Fundación Amanecer (1%)
DOMINICAN REPUBLIC (<1%)Esperanza (<1%)
ECUADOR (10%)Banco D-MIRO (3%)ESPOIR (4%)Fundación Faces (3%)
EL SALVADOR (3%)CrediCampo (3%)
GUATEMALA (2%)Friendship Bridge (2%)
HAITI (1%) Fonkoze (1%)
HONDURAS (4%)COMIXMUL (2%)IDH (2%) RAOS (0%)
MEXICO (10%)CESMACH (0%) CONSERVA (4%)Pro Mujer in Mexico (<1%)Triunfo Verde (0%) VisionFund Mexico (5%)
NICARAGUA (9%)FDL (3%)MiCrédito (2%) Pro Mujer in Nicaragua (4%)
PERU (25%)ADRA (8%)Alternativa (Peru) (1%) APROCASSI (2%) Arariwa (<1%)Crediflorida (3%)FONDESURCO (3%)NORANDINO (6%) Pro Mujer in Peru (2%)
CASH (12%)
Note: All percentages have been rounded to the nearest whole number. Social Investment Fund 5.0Percent of investable assets
<1% Dominican
Republic
4% Honduras
1% Haiti
20% Bolivia
4% Colombia
10% Ecuador
3% El Salvador
2% Guatemala
10% Mexico
25% Peru
12% Cash
9% Nicaragua
Outstanding PositionsDistribution by Country
Global Partnerships | Q3 2014 | As of Sept. 30, 2014 | Page 7
| |
All FundsPercent of investable assets
BOLIVIA (23%)
CENTRAL AMERICA (<1%)
COLOMBIA (2%)
DOMINICAN REPUBLIC (<1%)
ECUADOR (20%)
EL SALVADOR (3%)
GUATEMALA (4%)
HAITI (<1%)
HONDURAS (2%)
MEXICO (9%)
NICARAGUA (12%)
PERU (17%)
CASH (7%)
2% Colombia
<1% Haiti
<1% Dominican
Republic <1% Central America
2% Honduras
4% Guatemala
17% Peru
12% Nicaragua
23% Bolivia
20% Ecuador
9% Mexico
3% El Salvador7%
Cash