Download responsAbility - CSR

«Combining values with value»
- an introduction to development investments
February
2017
Christian H Thommessen
Board Member, responsAbility Investments AG
e: [email protected]
t: +47 91 888 000
Global sustainability challenges
– 1.4 billion p.a. investment needed
Investments
The Global Goals
for Sustainable Development
165
BUSD
?
BUSD
58%
80
BUSD
42%
Private investments
Public funds
Yearly private, commercial investment needs: 600 billion $ (42%)
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Global sustainability challenges
– an investment opportunity
Private investments break-down
BUSD/year 2015-2030
100 %
132
156
Unmet demand in developing
countries
165
BUSD
110
BUSD
*
80
BUSD
4
11
76
50 %
74%
73%
72%
No access to
electricity
Unbanked
Living in
moderate poverty
216
Transport infrastructure
Water supply
Access to electricity
0%
Agriculture and food security
Telecom infrastructure
Power infrastructure
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Models for addressing sustainability issues
Business
attractive
Development
investments
SRI/ESG
Green
bonds
Illegal
Harmful
Neutral to positive
S.I.B
do-good/common
interest
Venture
Philantropy
Business
unattractive
O.D.A.
Philantropy
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Development Investments offer scale and return
Investing in frontier and emerging markets with
measurable triple bottom line objectives:
• helping people lift themselves out of poverty
• positive environmental contribution
• market-based financial returns
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Development Investments
– addressing «the next 3 billion»
1st
billion
(OECD)
2nd billion
(Advanced emerging markets)
The next 3
billion
The bottom billion
responsAbility Nordics AS
•
•
•
•
empowerment, not aid
need support to unleash own
resources
large purchasing power
development investing/microfinance
•
•
limited resources
aid, philantropy
6
Development Investment portrait:
Saraplast
Investment opportunity
Business case
Financials (USD million)
5
10
4
8
6
4
Pre investment
12
3
2
1
2
-
FY13A
FY14A
FY15P
FY16P
Revenue (Left)
 Inadequate sanitation costs India ~ 6.4% of GDP
 Saraplast is India’s leading provider of portable
sanitation services with around 3,000 portable
toilets across seven cities
 Serving construction sites and events
 The company addresses the lack of access to
sanitary installations of 600 million Indians
FY17P
FY18P
FY19P
EBITDA (Right)
Financials:
 responsAbility invested USD 1.5m in March 2013
and has been helping the company to scale its
operations
 Stable revenue growth and scalable
Development impact:
 155m litres of waste collected
 > 500,000 unique users reached
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Development Investment portrait:
Mountain Hazelnuts Ventures, Bhutan
Business Model:
Investment Rationale:
 World-class hazelnut production in Bhutan,
planting 10 million hazelnut trees with local
farmers on degraded land.
 Attractive financial returns (30%+ IRR – MOI 5x-6x)
 High developmental and environmental return
 Income generation for farmers
 Total annual production (at maturity) of the
company will be 40,000 metric tons
 Stabilizing top soil, reducing erosion and build soil
carbon, Sequester ~1.5 million tons of CO2
 Planting up to 15,000 orchards in Bhutan
 Large and growing international market for
hazelnuts, with interesting price dynamics
 Visible exit with one of largest confectionary
groups in the world
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Development Investment portrait:
Market leader in organic food and feed business (Africa &
Asia)
Investment opportunity
Business case
Financials (USD million)
400
300
200
100
0
2014 2015 2016 2017P 2018P 2019P 2020P 2021P
Revenue
EBITDA
Financials:
 High growth company with integrated supply chain; sourcing,
processing and exporting
 Operations across 4 countries; India, Philippines, Ethiopia, Uganda
 responsAbility looking to invest approx. USD 20m to set up local
processing facilities and expand product portfolio to include
additional high-margin organic products
 Sourcing from over 28,000 certified farmers, coverage of 153,000+
acres of farm land & 125,000 acres of wild/forest land
 Strong growth & opportunities to scale: 30% IRR target on investment
 Diversified across 3 verticals in organic foods and fibre industry:
 Engaged in many farming projects across its network of certified
farmers to supply new farming equipment
 Generates consistent crop yields, safe farming practices, sustainable
supply of crops and stable pricing
 Working with 28,000 certified smallholder farmers in developing
countries
 Animal feed; soya meal, oil and bean
 Organic food; sugar, spice, oilseeds, cereals, vanilla, cocoa
 Whole body; virgin coconut oil and cotton
Development impact:
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Development Investments
– a rational diversification strategy
Investee markets
Western Markets
•
•
•
1 billion people
1-2% GDP Growth
Mature market
segments
•
•
•
3+ billion people
4-6% GDP Growth
Underserved market segments
•
50% lack access to energy
•
70% lack access to finance
•
60% lack access to education
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responsAbility – a leading private development
investor
responsAbility holds 12.5% of all private
sector DI AuM and 8% of all DI AuM
responsAbility is active in the
three most relevant sectors
DI AuM composition total 40 bn
Most relevant DI sectors
16,0
3 bn
14,0
15 bn
21bn
USD bn
12,0
10,0
8,0
6,0
4,0
2,0
-
DFIs
Private Sector
responsAbility
Source: GIIN 2016, responsAbility
analysis
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responsAbility investments AG – a global leader
• 3,1 bln USD AuM -> invested in 546 companies in 96 countries
• Investors; Fin.Institutions, Pension Funds, DFI’s and small savers
• Owned by Swiss banks + employees -> regulated by FINMA, CSSF, Finanstilsynet ++
Oslo
Luxembourg
Paris
Zurich, HQ
Geneva
Hong Kong
Mumbai
Bangkok
Nairobi
Lima
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Dynamic, risk-return focused investment strategy
16.3%
Central Asia
6.2%
3.9%
Other
Eastern
Europe
7.8%
Middle East and
North Africa
26% Asia-
10.9%
Pacific
Sub-Saharan
Africa
16.2%
South America
Investment volume per country
as of 30.12.2016
more than 3%
1-3%
less than 1%
responsAbility Nordics AS
Investment volume per region
in % of total, as of 30.12.2016
%
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Seeking value and values
– three sectors and two asset classes
Finance
Agriculture
Energy
Private
Debt
financing
Microfinance,
SME* banks
Agriculture value chain
Renewable Energy,
Energy Efficiency,
Energy access
Private Equity
investments
Microfinance,
SME* banks,
insurance
Agriculture value chain
Renewable Energy
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Our Milestones
– USD 3.1 mill AuM
Global Agriculture
Private Equity
Finance
responsAbility
Fair Agriculture Fund
Agriculture
Energy
AuM in m USD
responsAbility
Voncert II
responsAbility
Renewable
responsAbility
Energy Holding
Financial
Inclusion Fund
responsAbility
Voncert I *
Mixed
responsAbility
MikrofinanzFonds
responsAbility Global
Microfinance Fund
responsAbility
Energy Access Fund
responsAbility
Microfinance
Leaders
responsAbility
Ventures I
Microfinance
Enhancement
Facility
Global Climate
Partnership
Fund
responsAbility
Participations
AG
responsAbility BOP
Investments
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Investment Solutions
Fund name
responsAbility Global
Microfinance Fund
Finance
Agriculture
Energy
responsAbility SICAV
(Lux) MikrofinanzFonds
responsAbility SICAV
(Lux) Microfinance
Leaders
Target
return*
AuM
Inceptio
n
Availability
Debt
3 - 5%
USD
1’073 m
11/2003
Monthly
Debt
3 - 5%
EUR 585 m
05/2007
Monthly
Debt
4 - 7%
USD 278 m
11/2006
Monthly
IRR 15%
CHF 139 m
05/2012
On request
3 - 5%
USD 213 m
12/2011
Monthly
Equity**
IRR 15%
(net)**
USD 150
m**
2017**
On request**
Debt
Various
USD 331 m
12/2009
On request
Equity
IRR 18%
USD 25 m
12/2013
On request
Debt
3 – 4.5%
USD 34 m
03/2015
Closed
Investment
category
responsAbility
Participations AG
Equity
responsAbility Fair
Agriculture Fund
Debt
Planned Agriculture
Private Equity**
Global Climate
Partnership Fund S.A.,
SICAV-SIF
responsAbility
Renewable Energy
Holding
responsAbility Energy
Access Fund S.A.,
SICAV-SIF
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ResponsAbility’s Impact Themes
Our focus areas
Basic needs:
 # of customers reached
 volume sold or exported
 # / volume certified / traceability system
Well being:
 Revenues earned and taxes paid
 # / volume of higher quality products produced and / or
consumed
Decent Work:
 # of jobs created + wages earned
 # smallholder farmers reached + earnings by smallholder
farmers
 Average agricultural yield (client or supplier)
Healthy ecosystem:
 Protected land area
 Ecological restoration management area
 Ecosystem services provided
 Area of land reforested / deforested
Climate stability and Infrastructure:
 Greenhouse gas reductions
 Use of pesticides
 Water savings / water consumption
 Area of land / water sustainably managed
Please refer to the disclaimer pages and/or the appendixes for the applicable legal information
Source: Cambridge University and United Nations Sustainable Development Goals, 2016; Indicators are not IRIS aligned
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