Mark Joenje: ‘’With the first closing of the C4D Asia Fund, we will finance the growth of over 50 SMEs to create jobs and bring solutions to people with little opportunities to secure their livelihoods and to further develop themselves.’’
Capital 4 Development Partners (C4D Partners) is an independent fund management company with offices in The Netherlands, India, Indonesia and the Philippines. C4D Partners manages impact capital and supports growing Small and Medium Enterprises (SMEs) to bring about and promote fair economic development in emerging countries. They just started their second fundraising round, to raise USD 20 million for their second closing.
What is the special focus of your new fund? ‘
’The C4D Asia Fund is a USD 50 million fund, of which USD 30 million has already been raised. The Fund invests in scalable, impactful SMEs in India, Indonesia and the Philippines. It builds upon its USD 9 million launching portfolio in order to support positive social, environmental and economic change in the lives of marginalized communities. We invest in innovative growth stage SMEs that address and solve local challenges and/or industry inefficiencies. In addition, the Fund’s investment strategy is characterized by an integrated gender lens.’’
What makes this SME fund unique compared to other SME funds?
‘’The C4D Asia Fund has 4 key components that distinguish the Fund from other SME funds:
1. Integrated Gender lens: we apply a gender-balanced investment approach to support our investment decisions and outcomes, financially as well as socially. We are therefore committed to establishing a diversified portfolio, strengthened by the Fund Manager’s carry distribution that is dependent on the Funds achievements in investing in Women SMEs.
2. De-risking First loss facility: To de-risk, the Fund, the Fund’s Sponsor Investor (ICCO Cooperation) is providing a first loss facility of USD 10 million, as well as a preferred return to non-Sponsor investors. Upon liquidation of the Fund, the non-Sponsor Investors will be repaid their invested capital and receive a minimum return of 2%, prior to the sponsor investor.
3. Portfolio Support Programme: A fundamental part of the Fund’s investment strategy is the alignment between C4D Partners and the investee. Before we finalize an investment, we jointly create a shared vision on the business and impact objectives. This provides us and the SME with essential input to design a needs-based support programme, catered for by our Portfolio Support Programme (PSP) through coaching, limited financial grant contributions, and access to local and international networks.
4. Country Specific Investment Strategy: We have developed a tailored country-specific investment strategy for each of the geographies we invest in. In India, we invest mostly with Equity and Equity-like instruments, and in the Philippines and Indonesia mostly with Mezzanine instruments and Venture Debt. This allows us to structure investments in a way that matches with the developments of the portfolio companies and the exit environments in the different geographies.’’