Through fund investments, Norfund reaches more companies and other business areas, than we could on our own. The fund managers contribute to developing local, sustainable companies based on local knowledge, industrial insight and efficiency initiatives.


in Norfund portfolio as of 2019


Committed as of 2019


in fund portfolio

Why Invest through Funds

Norfund invests in private equity funds to gain access to areas in need of investments outside our internal expertise. The fund managers possess both local knowledge, industrial insight as well as capabilities in growth and efficiency initiatives. Norfund therefore sees fund managers as a very valuable way to access investment areas that otherwise would be difficult.

Investing in private equity funds contributes to building and developing local businesses as well as contributing to more professional and efficient business practices. Local fund managers are well positioned to provide entrepreneurs with access to risk capital. They create val­ue through active ownership and professional expertise and provide local knowledge to support the company’s development and growth.

Committed by Geographical Region (2019)

What we invest in

Norfund invests in funds that have an investment approach aligned with Norfund’s strategy. Through funds we will also invest in sectors and industries where Norfund does not have direct investment capabilities. Geographically we want our fund investments to be significantly exposed to countries on our “core” and “extended reach” list. It is however not required that all investments for a fund is in our prioritized countries.

Private Equity Funds

Our strategy is to invest in funds in which our participation will have a significant developmental effect. We do this through investing in a broad spectrum of funds. On the larger end, we invest in larger, often pan-regional funds that themselves invest in relatively large companies. Several studies have shown that large companies often are more efficient than smaller ones. Moreover, there are relatively few large companies in many of Norfund’s prioritized countries. Hence, helping these larger companies getting access to capital may lead to more professional and efficient businesses.

Small and Medium Sized Enterprises Funds

Historically Norfund has focused on small and medium sized enterprises (SME’s) in its fund investments. This continues to be an important area. This business segment often faces a particularly challenging funding environment. These businesses are often owned and run by persons with roots in the local communities, and an investment in these companies may have a direct effect for people we want to reach.

Impact/Venture Funds

Thirdly, Norfund also invests in very challenging business environments. Several countries don’t have developed markets for funding neither through banks nor through equity markets. In such situations Norfund may support the establishment of new pri­vate equity funds, such as the Kinyeti Fund in South Sudan. One may also invest in established funds that addresses the special challenges in such markets. These initiatives may be time consuming, but if successful also proves very valuable to the local communities with an undisputed development effect.

Committed by Type of Fund (2019)

Our requirements

Norfund is dedicated to invest towards the managers/partners that can offer the best outcome in terms of commercial viability as well as developmental impact. Experience has shown that the best results are often found in experienced managers who have managed a few funds successfully with a stable and established team of competent professionals. A large part of our funds is therefore allocated to such managers.

An important criterion for our investments is to be additional. This means that our investments go towards funds and companies which otherwise would find it difficult to be funded. Hence, we also support new fund initiatives, either as a new fund that want to raise capital or as an existing fund who wants to invest in a new area. Our experience tells us that such initiatives are challenging. We therefore only fund such initiatives when backed by very talented and well positioned managers.

Relevant partners/fund managers are characterized by the following:

  • Has the required capacity to succeed in managing sustainable businesses
  • Has comprehensive and relevant technical expertise
  • Is local and/or know the local context
  • Adhere to national rules and legislation and is willing to adapt to IFC environmental and social performance standards
  • Has zero tolerance for corruption

Highlights from 2018

Lack of access to capital is a major constraint for business development in Myanmar. The banking sector is underdeveloped and there are few other kinds of financial institutions. In 2018, Norfund successfully invested in Myanmar Opportunities Fund II (MOF II), a Yangon-based investment fund which targets SMEs in Myanmar. The fund focuses primarily on consumer products and services, technology, and financial services.

Norfund, together with Shuraako and the Danish development finance institution, IFU, has established a USD 10 million fund to support small and medium sized companies in Somalia. The Nordic Horn of Africa Opportunities Fund is among the first commercial investment funds in Somalia and the business environment in Somalia is extremely challenging. In this setting, the Fund will fill an investment gap by funding SMEs that have no other sources of capital, and a positive return on investment is expected.

Ethiopia urgently needs capital and enhanced financial and operational skills. In 2018, Norfund made an investment in the first close of the Cepheus Growth Capital Fund, an investment fund targeting small and medium sized companies in Ethiopia. Cepheus Growth Capital Fund was founded by Ethiopian-born partners who have extensive local networking and private equity experience. Cepheus target export-oriented or import-substituting small and medium sized companies. It focuses on investments in companies operating in some of Ethiopia’s most rapidly growing sectors such as manufacturing, agriprocessing and services.

The Eco Enterprises Fund III provides capital to local community-based businesses in Latin America that are focused on the sustainable use of natural resources. The fund will be used to construct a diversified portfolio, targeting sustainable growth stage ventures in environmental sectors. SMEs working in the conservation and biodiversity sector often have limited access to growth capital and lack adequate business management skills. EcoEnterprises is taking an holistic approach, by measuring financial benefits as well as environmental and community development impacts.

ECP Africa Fund IV is an investment fund that targets mid-sized, high-growth companies in Africa. Its main focus is companies which serve basic African consumer needs and/or vital African business requirements. ECP’s strategy is to be an influential investor, and the Fund will assist companies in addressing the opportunities and challenges they face. The Fund is managed by the management company Emerging Capital Partners (ECP) which has offices in Abidjan, Johannesburg, Lagos, Tunis, Nairobi, and Douala.