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Small- and medium-sized enterprises are essential to a well-functioning economy. This type of enterprise gives rise to local employment, diversification and economic growth. Investment in this type of fund is a convenient strategy for reaching out to small- and medium-sized enterprises, because investment in the SME sector in Norfund’s market is challenging, and the enterprises require close follow-up. Experience shows that selected local funds managers can do this job in an appropriate manner, and contribute to creation of considerable value. Norfund has accumulated competence in selection of fund managers and establishment of appropriate fund structures.
Norfund invests equity capital in private equity funds, such as venture capital and other investment funds targeting SMEs that require growth capital and expertise. By investing in SME funds and fund managers, Norfund helps build the formal economy and strengthen local capital markets. Norfund will continue investing in SME funds, primarily through external fund management companies where Norfund is not itself an owner, and also in some cases through establishment and ownership of fund management companies where a demand has been identified in the market.
Norfund’s focus on SMEs, the willingness to invest in first-time fund managers and to establish funds and fund management companies where the demand exists, currently best represents Norfund’s key aim of being additional. Norfund cooperates with other investors to achieve greater transparency in the investment funds in terms of legal frameworks and fee structures.
Norfund invests in SME funds that have a pronounced development profile and where there is a clear lack of capital. At the same time, it remains important to mobilize private capital for fund investments. Norfund therefore invests in funds that have no access to commercial capital because of their small size, a restricted field of investment or few demonstrable results, but also in larger and more experienced funds that have little capital, to which Norfund can attract private investors.
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Key figures at 31 December 2010 |
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Portfolio
Africa:
Africa Health Fund
Region: Africa
Instrument: Equity capital
Year of initial investment: 2011
Africa Health Fund is targeting small and medium sized companies that help low-income Africans gain access to affordable but high-quality health services. The fund is managed by Aureos Capital and has total commitments of USD 105 million, whereof Norfund has committed USD 10 million.
African Infrastructure Fund (AIF)
Region: Africa
Instrument: Equity capital
Investment year: 1999
African Infrastructure Fund is an equity capital fund which has invested in infrastructure projects in a number of African countries. The fund has enjoyed major successes with projects in the fields of telecommunications, water/energy and aviation. The fund has a total capital of NOK 3.1 billion, and Norfund has invested NOK 38 million. Main co-investors in the fund are AIG, IFC and the African Development Bank (ADB). The fund has produced significant development effects through its contributions to development of infrastructures in Africa, and by its favourable performance it has also had a demonstration effect for investors.
Agri-Vie Fund
Region: Sub-Saharan Africa
Instrument: Equity capital
Investment year:
Agri-Vie is a private equity investment fund focused on agribusiness in Sub-Saharan Africa. The fund’s vision is to be a catalyst for sustainable growth through investing in one of the foundation sectors of Africa’s economies. Focus will be on the development and expansion of existing ventures, which can lead to a marked effect on food prices and job creation. The fund was initiated by SP-aktif and Sanlam Private Equity. It has a total capital equal to NOK 657 million, whereof Norfund has invested NOK 64 million. Other investors include Sanlam Life, the Development Bank of Southern Africa, the Industrial Development Corporation, the Kellogg Foundation, the European Investment Bank and the International Finance Corporation.
Angola Capital Partners LLC
Region: Angola
Instrument: Equity capital
Investment year: 2009
Angola Capital Partners is a management company that manages Fundo de Investimento Privado – Angola (FIPA). Norfund owns 50 per cent of the company, while the remaining 50 percent are held by the local bank Banco Africano de Investimento (BAI). Norfund worked for several years to establish both Fipa and Angola Capital Partners LLC, because the Angolan capital market has previously not had this type of institution.
Aureos Africa Fund
Region: Africa
Instrument: Equity capital
Investment year: 2008
Aureos Africa Fund is an equity capital fund investing in small- and medium-sized enterprises in selected African regions. The total capital of the fund corresponds to NOK two billion, and Norfund has invested NOK 230 million. Among the other investors are the British CDC and the Dutch FMO, as well as IFC (The World Bank) and several private enterprises. Aureos Africa Fund is one of the largest funds that target small- and medium-sized enterprises in Africa. By delivering good financial results over time, Aureos has succeeded in attracting a large proportion of private capital to the fund, which is essential in a long-term development perspective.
Aureos East Africa Fund (AEAF)
Region: East Africa
Instrument: Equity capital
Investment year: 2003
AEAF invests in small- and medium-sized enterprises in East Africa, with a particular focus on Kenya, Tanzania and Uganda. The fund has a total capital equal to NOK 230 million, whereof Norfund has invested NOK 46 million. Other investors include the British CDC and the Swiss SIFEM. The fund is very active in the development of its investments, and provides management skills, strategy and business development, in addition to improvement of financial management and reporting in the enterprises. The long-term development effects of these efforts include sound and viable enterprises, competence enhancement and transfer, places of employment and economic growth.
Aureos West Africa Fund (AWAF)
Region: West Africa
Instrument: Equity capital
Investment year: 2003
AWAF invests in small- and medium-sized enterprises in West Africa, with a particular focus on Nigeria, Ghana and Senegal. The fund has a total capital of NOK 290 million, whereof Norfund has invested NOK 76 million. Other investors include Britain’s CDC, the European Investment Bank (EIB) and two local commercial banks in Nigeria. Over all, the fund has succeeded extremely well in enhancing the profitability of the enterprises in which it has invested, and has thereby produced significant development effects. At the same time, the fund has established a basis for attracting new investors to Africa, which in turn will further strengthen the development effects.
Aureos Southern Africa Fund (ASAF)
Region: Southern Africa
Instrument: Equity capital
Investment year: 2003
ASAF invests in small- and medium-sized enterprises in Southern Africa, with a particular focus on Mozambique, Zambia and South Africa. The fund has a total capital of NOK 290 million, and Norfund has invested NOK 72 million. The main co-investors are CDC and EIB. The fund contributes management skills, strategy and business development, and acts to improve financial management and reporting in the enterprises. The long-term development effects of this effort include sound and viable enterprises, competence enhancement and transfer, places of employment and economic growth.
Business Partners Madagascar SME Fund
Region: Madagascar
Instrument: Equity capital
Investment year: 2006
Business Partners Madagascar is a venture-capital fund investing in small enterprises in Madagascar. The total capital of the fund constitutes NOK 71 million, whereof Norfund has invested NOK 10 million. Other investors include IFC and the European Investment Bank (EIB). Business Partners is a South African company, and this fund represents its first venture outside South Africa. The fund is based on Business Partners’ established systems and investment criteria, and provides access to venture capital for small entrepreneurs in Madagascar, within a market that offers very limited access to unsecured financing.
Evolution One Fund
Region: Africa
Instrument: Equity capital
Investment year: 2009
Evolution One Fund is an equity capital fund that targets small- and medium-sized enterprises in the energy and environmental technology sectors. The fund has a total equity of NOK 452 million, and Norfund has invested NOK 39 million. Our main co investors include the African Development Bank (ADB), Finnfund, IFC and Consensus Business Group. With its investment in Evolution One Fund, Norfund wishes to contribute to growth in the environmental technology sector in Southern Africa.
Fanisi Venture Fund East Africa
Region: East Africa
Instrument: Equity capital
Investment year: 2009
Fanisi Venture Fund East Africa is a venture fund that provides risk capital to growth-oriented entrepreneurs and SMEs. The fund has a total capital of NOK 231 million, and Norfund has invested NOK 87 million. Other investors include IFC, Proparco and Finnfund. The fund aims to invest from three to seventeen million NOK and will thereby fill a gap in the financial market. Norfund has been active in establishing the fund and holds an ownership share in the management company. Watch a video about Fanisi here.
Fanisi Venture Management
Region: East Africa
Instrument: Equity capital
Investment year: 2009
Fanisi Venture Management is a management company that manages Fanisi Venture Fund East Africa. Norfund owns 50 per cent of the company; the remaining half is held by Amani, which is owned by the employees. Norfund initiated the establishment of the company, based on a wish to develop the capital market in East Africa by setting up management capability in an area that was underdeveloped in the East African market.
Fundo de Investimento Privado – Angola (FIPA)
Region: Angola
Instrument: Equity capital
Investment year: 2009
Fundo de Investimento Privado is an equity capital fund that targets small- and medium-sized enterprises found outside the dominant petroleum and diamond industries in the country. The fund has a total capital of NOK 162 milion, and Norfund has invested NOK 43 million. The other investors are IFU, EIB, Banco Africano de Investimento (BAI) and Banco Privado Atlantico (BPA). Angola is rich in natural resources and has a considerable potential in a number of industries. FIPA wishes to contribute capital and also to professionalize the enterprises it invests in which it invests. This will serve to increase employment in the formal economy and make new goods and services available in the country. Norfund has acted as a key initiator of the fund and also holds an ownership share of the management company.
GroFin Africa Fund
Region: Africa
Instrument: Equity capital
Investment year: 2008
GroFin Africa Fund offers loans and equity capital in local currency to small enterprises in South Africa, Kenya, Uganda, Tanzania, Rwanda, Nigeria and Ghana. The fund’s total capital corresponds to NOK 990 million, and Norfund has invested NOK 87 million. Norfund’s co-investors include IFC, CDC, FMO, the African Development Bank (AFDB), Shell Foundation, EIB and Proparco, in addition to GroFin itself. GroFin takes an active approach to its investments, and in addition to providing equity capital and loans, GroFin acts as advisors to its borrowers in fields such as management, marketing, financial planning and reporting. This is a good starting point for establishing viable small enterprises over time, thereby contributing to poverty alleviation, establishment of new places of employment and economic growth.
Horizon Equity Partners Fund III
Region: South Africa
Instrument: Equity capital
Investment year: 2007
Horizon Equity Partners Fund III is an equity capital fund that invests in small- and medium-sized enterprises in South Africa. The fund has a total capital of NOK 456 million, and Norfund has invested NOK 39 million. Our main co investors are Vunani PEF and Brait AEP. Horizon has a good performance record. Positive financial results over time can contribute to ensuring places of employment and economic growth.
I & P Capital II
Region: The Indian Ocean
Instrument: Equity capital
Investment year: 2007
I & P Capital II is an equity capital fund investing in small- and medium-sized enterprises in Madagascar and other countries in the Indian Ocean (Comoros Islands and Mauritius). The total capital of the fund corresponds to NOK 309 million, and Norfund has invested NOK 42 million. Other investors include Britain’s CDC, France’s PROPARCO and the European Investment Bank (EIB), as well as local, private investors. I & P contributes actively to their investment projects in the form of capital and skills, in some of the poorest countries in the region.
Vantage Mezzanine Southern Africa Fund II
Region: Africa
Instrument: Equity
Year of initial investment: 2011
Vantage Mezzanine Fund II focus on providing mezzanine finance to fast growing, mid-market companies which are highly scalable, and have the capacity to compete regionally and internationally, but are starved of capital due to their limited ability to raise funding from local financial institutions. The fund anticipates to raise NOK 1000 million at final close, whereof Norfund has invested NOK 75 million.
Vantage will be playing an important developmental role as a promoter of a new asset class in African markets. The Vantage Mezzanine Fund II will broaden the financial services sector in Africa with the transfer of skills, experience and mezzanine finance to markets where no significant amount of mezzanine has been available to date.
Central and Latin America:
Central American Small Enterprise Investment Fund (CASEIF I)
Region: Central America
Instrument: Equity capital
Investment year: 2000
Central American Small Enterprise Investment Fund (CASEIF I) provides loans and equity capital to small enterprises in Central America. The fund has a total capital of NOK 90 million, and Norfund has invested NOK 29 million. Our main co investors are Lafise, MIF and Nordic Development Fund. CASEIF I offers venture capital on a magnitude of NOK 3-9 million, and these relatively small amounts fill a gap in the Central American capital market. Norfund contributed to the establishment of the fund and holds an ownership share in the management company (Lafise Investment Management).
CASEIF II
Region: Central America
Instrument: Equity capital
Investment year: 2007
CASEIF II is a loan and equity capital fund investing in small- and medium-sized enterprises in Central America. The fund has a total capital of NOK 167 million, and Norfund has invested NOK 23 million. Our largest co investors are MIF, FMO, Bio, SIFEM and Finnfund. CASEIF II is a second-generation fund that follows up CASEIF I. Norfund initiated CASEIF II jointly with the local bank Lafise in Nicaragua. By establishing two funds Norfund has proven successful in developing a sustainable financial facility for small enterprises in Central America.
Lafise Investment Management (LIM)
Region: Central America
Instrument: Equity capital
Investment year: 1999
Lafise Investment Management is a management company for CASEIF I and II. Norfund owns 20 per cent of the company; the remaining 80 per cent are owned by Lafise, a local Nicaraguan bank. LIM has developed expertise in managing small enterprises in the Central American market and was also the first management company that Norfund helped establish.
Aureos Central America Fund (ACAF)
Region: Central America
Instrument: Equity capital
Investment year: 2002
Aureos Central America is a loan and equity capital fund investing in small- and medium-sized enterprises in Central America. The fund has a total capital of NOK 210 million, and Norfund has invested NOK 58 million. Our largest co investors are CDC and IFC. The fund has played a key role in supporting Central American SMEs with venture capital in the early stages.
Aureos Latin America Fund (ALAF)
Region: Latin America
Instrument: Equity capital
Investment year: 2007
Aureos Latin America Fund (ALAF) is an equity capital fund investing in medium-sized enterprises in Latin America. The fund has a total capital of NOK 1.05 billion, and Norfund has invested NOK 144 million. Our largest co investors are CAF, CDC, FMO and the Colombian pension fund. The fund focuses on investments in Central America, which is the poorest region of Latin America.
Aureos Central America Growth Fund (Emerge)
Region: Central America
Instrument: Equity capital
Investment year: 2006
Aureos Central America Growth Fund (Emerge) offers equity capital and convertible debt financing to small- and medium-sized enterprises in Central America and the Dominican Republic. The fund has a total capital of NOK 121 million, and Norfund has invested NOK 17 million. Our main co investors are CDC, FMO and MIF. The fund invests exclusively in enterprises that fulfil the criteria as an SME. Increased access to venture capital is intended to allow the enterprises to expand, and thereby recruit more labour. This will in turn produce positive ripple effects throughout Central American economies.
Asia:
Aureos South Asia Fund (Holdings)
Region: South Asia (India, Bangladesh, Sri Lanka)
Instrument: Equity capital
Investment year: 2006
Aureos South Asia Fund is a loan and equity capital fund investing in small- and medium-sized enterprises in India, Sri Lanka and Bangladesh. The fund has a total capital of NOK 500 million, and Norfund has invested NOK 115 million. Our largest co investors are FMO, CDC and Trancentury. The fund expects to be fully invested by January 2011. Overall, the fund has seen a positive development of its portfolio. Aureos, in the role of a fund management company and with local teams, provides close follow-up to the enterprises, and through its board positions contributes to good corporate governance and strategy development.
Aureos South Asia Fund (ASAsia 1)
Region: Sri Lanka
Instrument: Equity capital
Investment year: 2004
CDC and Norfund established this interim fund jointly with Aureos in order to maintain activity in the region and make use of available opportunities until Aureos South Asia Fund Holding could start operating. The fund has a total capital of NOK 58 million, and Norfund and CDC have each contributed one half. The fund has undertaken investment in Sri Lanka.
Aureos South East Asia Fund (ASEAF)
Region: Southeast Asia
Instrument: Equity capital
Investment year: 2004
Aureos South East Asia Fund (ASEAF) offers venture capital to small- and medium-sized enterprises in Thailand, the Philippines, Indonesia and Vietnam. The fund has a total capital of NOK 404 million, and Norfund’s share constitutes NOK 116 million. CDC, FMO and ADB are our largest co investors. Local teams in each country check on the enterprises. Good investments in the four countries have produced a lot of useful experience and a positive development for the investment enterprises. This has served as a good basis for providing capital to the next fund that Aureos manages in the region - ASEAF II (see below).
Aureos South East Asia Fund (ASEAF) II
Region: Southeast Asia
Instrument: Equity capital
Investment year: 2010
ASEAF II is Aureos’ second fund for South East Asia targeting Indonesia, Thailand, the Philippines, Vietnam and Malaysia. The fund will contribute risk capital to SMEs in the target region. Norfund has committed 5 million USD to the fund.
China Environment Fund
Region: China
Instrument: Equity capital
Investment year: 2005
China Environment Fund is an equity-capital fund investing in small- and medium-sized enterprises in the field of environmental technology. The fund has a total capital of NOK 173 million, and Norfund has invested NOK 17 million. Our largest co investors are FMO, the Asian Development Bank and the Private Less Group in Hong Kong. The fund has experienced an extremely favourable development. In addition, this investment has contributed to considerable development effects in the form of promoting environmental technology in one of the world’s most polluted countries, as well as by creating a large number of jobs.
Cambodia - Laos Development Fund
Region: Cambodia, Laos
Instrument: Equity capital
Investment year: 2009
Cambodia-Laos Development Fund is an equity capital fund investing in small enterprises in Cambodia and Laos. The fund has a total capital of NOK 58 million, and Norfund has invested NOK 23 million. The other investors in the fund are Finnfund and International Finance Corporation (IFC). Cambodia-Laos Development Fund is one of the first of its kind in the region, and wishes to contribute to growth of small- and medium-sized enterprises in the two countries. The fund intends to establish a local management company that eventually will be well placed to attract international private investors.
Frontier Fund
Region: Bangladesh
Instrument: Equity
Investment year: 2010
The Frontier Fund is the first Private Equity (PE) fund in Bangladesh. The fund will provide growth or expansion capital to SMEs. Bummer& Partners Asset Management (Bangladesh) Ltd is the advisor and investment manager of the fund. In addition to being in line with Norfund’s strategy on providing risk capital and value to SMEs, the investment is also a strong contribution to building up the first Bangladesh dedicated PE fund, and to promote Private Equity as an asset class. The much needed capital provided by the fund will help companies to grow and create employment. Norfund has committed to invest USD 10 million in the fund.
SEAF Blue Water Growth Fund
Region: Vietnam
Instrument: Equity capital
Investment year: 2008
SEAF Blue Water Growth Fund provides loans and credit to small enterprises in Vietnam. The fund has a total equity of NOK 144 million, and Norfund has invested NOK 29 million. Our largest co investors are Finnfund, Sifem and FMO. This fund contributes in a unique manner to development of the capital market in Vietnam, by being the first provider of loans to small enterprises that otherwise would have no access to credit. The long-term plan is to convert the fund into a financial institution.
SEAF Sichuan Small Investment Fund
Region: China
Instrument: Equity capital
Investment year: 2000
SEAF Sichuan Small Investment Fund invests in small- and medium-sized enterprises in the Sichuan province in China. The fund has a total capital of NOK 130 million, and of these Norfund has contributed NOK 17 million. DEG and Swedfund are found among the largest co investors in this fund. By providing close follow-up the fund has contributed to good corporate governance and development of social and environmental awareness in the companies in which it has invested.
Biotechnology Ventures Fund (APIDC)
Region: India
Instrument: Equity capital
Investment year: 2005
Biotechnology Ventures Fund (APICD) is a venture fund investing in enterprises in the health and pharmaceutical industries and in environmental enterprises. The fund has a total capital of NOK 214 million, and Norfund has invested NOK 16 million. The most important co investors are IFC and ADB, as well as some of the largest Indian banks and some local investment groups. The management company contributes strongly to the development of the enterprises, by providing close hands-on follow-up in this segment of innovative enterprises that grow quickly.
Europe:
SEAF Trans Balkan Equity Fund (TBF)
Region: Romania, Croatia and Bulgaria
Instrument: Equity capital
Investment year: 2000
SEAF Trans Balkan Equity Fund (TBF) has invested loans and equity capital in small- and medium-sized enterprises in Romania, Croatia and Bulgaria. The fund has a total capital of NOK 126 million, and Norfund has invested NOK 29 million. Co investors are IFC, Finnfund, SECO and BSTDB Black Sea Trade and Development Bank. The fund has been a key contributor to the development of local enterprises in the region.
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