The Netherlands: SNS Institutional Microfinance Fund collects record breaking am...
Amsterdam, The Netherlands, June, 06 2007 -
SNS Asset Management has closed its SNS Institutional Microfinance Fund with a record breaking commitment of € 125 million. This success has lead to the decision to reopen the fund until 1 October for a second tranche, to give more institutional investors the opportunity to participate.
The SNS Institutional Microfinance Fund is an investment fund aimed at alleviating poverty and producing an attractive investment return by providing capital to microfinance institutions (MFIs) in developing countries.
“We are very proud of the success of our new SNS Asset Management Microfinance Fund”, says Theo Brouwers, director of SNS Asset Management and responsible for developing and launching the fund. “We aimed for commitments totaling € 100 million. The fund's oversubscription is proof of the fact that institutional investors are searching for good investment opportunities that contribute to social development. The fast growing institutional market for microfinance demonstrates that professional asset management and social objectives are certainly not mutually exclusive. On the contrary, we would say.”
The SNS Institutional Microfinance Fund is the first fund in its kind and is founded exclusively for institutional investors. Theo Brouwers points out the unique fact that the interest for microfinance in the Netherlands has turned out to be so enormous that almost all subscribers are Dutch institutional investors. Among these investors are a dozen large pension funds such as Stichting Spoorwegpensioenfonds (Railway Pension Fund) and Stichting Pensioenfonds voor de Grafische Bedrijven (Pension Fund for the Printing Industry), but also REAAL Verzekeringen (REAAL Insurance).
The Fund uses a “balanced” approach toward its microfinance investments: approximately 70 percent of the Fund's capital will have a fixed income character whereas up to 30 percent will be invested in equity of microfinance institutions. What is special about the fund is that - next to the above mentioned unique investment mix - about half of all investments will be made in local currencies, thereby addressing the needs of the local financial community in developing countries. The portfolio will be well diversified and represent all regions of the developing world. Next to the social aspect the inflow of new institutional capital will contribute to a better market process of microfinance loans.
SNS Asset Management is an investment manager for institutional investors and is part of SNS REAAL, the 5th largest financial group in The Netherlands. The total amount of assets managed by SNS Asset Management is € 16.4 billion. In the field of sustainable asset management SNS Asset Management is a pioneer in further developing the sustainability concept.
SNS Asset Management has appointed DWM Asset Management LLC, a member of the Developing World Markets group, as investment manager for the fund. DWM has global experience in granting loans and other financial instruments to microfinance institutions. DWM has engaged Triple Jump, in which SNS REAAL has a stake, as sub-advisor for a minority portion of the Fund.
“This Fund offers institutional investors an opportunity to invest in a diversified portfolio of microfinance assets via a single investment vehicle managed by a professional team of emerging markets and microfinance investment specialists,” says Peter Johnson, Partner at DWM. Besides, by making long-term investments in MFIs it supports micro-entrepreneurs and other low-income individuals throughout the developing world.”
Support through the fund
The fund does not grant loans to individual businesses but lends money to microfinance institutions or invests in their share capital. Those MFIs in turn grant loans to businesses, mostly ranging between $ 100 and $ 1500 for a term of between six months and one year. These loans enable small self-employed operators to start or expand a business. Remarkably, 90 percent of these business operators are women who improve their own circumstances by starting or expanding their business, but also those of their households and families. The lives of millions in developing regions benefit from a total of € 100 million.