Finn Ivar Marum - Norfund 2018-05-09آ  Finn Ivar Marum EVP - SME Fund and Agribusiness...

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Transcript of Finn Ivar Marum - Norfund 2018-05-09آ  Finn Ivar Marum EVP - SME Fund and Agribusiness...

  • Finn Ivar Marum EVP - SME Fund and Agribusiness Investments

  • 25 %

    16 %

    12 %7 % 6 %

    7 %

    4 % 3 %

    20 %

    Agribusiness

    Manufacturing

    Wholesale/ Trade

    Financial Services

    Health and social work

    Communication

    Education

    Energy

    Other

    PE FUNDS WITH SME FOCUS

    2

    WHAT

    • Investments in small and medium-sized enterprises (SMEs) via external fund managers

    WHY

    • Shortage of risk capital especially pronounced for SMEs

    • Investing through funds enables outreach far beyond Norfund’s own capacity constraints

    Africa

    MNOK 1 400

    MNOK 250

    Latin America

    MNOK 400

    Asia

    COMMITTED

    2 056 MNOK

    FINANCED

    632 SME investments

    31.12.2017

  • FUND STRATEGY

    3

    Additionality Risk

    Capital

    Managing

    Monitoring

    Active

    Inexperienced fund managers and/or new fund establishments by Norfund

    Sector based and geographical focused funds

    Established Funds Managers with proved track record

  • INVESTMENTS IN 2017

    4

    Additionality Risk

    Capital

    Investments in 2017

    Managing

    Monitoring

    Active

    Nordic Horn of

    Africa Fund

  • INITIATIVES IN 2018

    5

    Additionality Risk

    Capital

    Managing

    Active

    Monitoring

    Commercially attractive risk/return

  • FOOD AND AGRIBUSINESS

    COMMITTED

    1 528 MNOK

    ASSOCIATED SMALLHOLDERS

    12 000 smallholder farmers linked with portfolio companies

    LOCAL SUPPLIERS

    1 200 MNOK in local purchases in 2017

    26 direct investments

    6

    Nairobi, Kenya

    Maputo, Mozambique

    Accra, Ghana

    Norfund’s regional offices

    WHAT

    • Investments with partners in individual companies in Southern and Eastern Africa, particularly in agribusiness

    WHY

    • High development effects from startup and high-risk projects

    • Attract expertise and technology to LDCs in Sub-Saharan Africa

  • INVESTMENT STRATEGY

    7

    Right Partners

    ▪ We seek competent industrial partners and a competent management team who share investment risk ▪ We strive to align investors and management with a shared game plan and milestones outlining roles and

    responsibilities of the investors, board and management ▪ We seek shared core values and a long term partnership

    Implement Institutional

    Practices

    ▪ Find and retain quality management team ▪ Institutionalised, customised reporting ▪ Improved transparency, internal controls, and financial management systems ▪ Better governance rights ▪ Best practices ESG monitoring

    Investment Themes

    ▪ Focus on fastest growing agribusiness sectors: including FMCG, transportation, storage, processing, manufacturing and retail sectors

    ▪ Leverage on demographic and socioeconomic changes: the rapid development of the African consumer class, improving standard of living, strong urbanization trends, growing local entrepreneurship and economic growth

    ▪ Introduce proven business models: look for managers and portfolio companies that seek to implement global best practices across the agribusiness value chain

    ▪ Import substitution: seek to focus on sectors and products that have unmet local demand (despite Africa’s agricultural resources and 75% of the population being involved in agriculture, Africa has been a net importer of food since the 1970s)

    ▪ Focus on infrastructure & value chain enhancement: lack of sufficient infrastructure and logistics systems represents major obstacle for many African businesses leading to enormous inefficiencies in the value chain

  • VALUE CREATION THROUGH ACTIVE OWNERSHIP

    8

    Value Creation Process

    8

    Value Creation Model

  • WE ENGAGE WITH MANAGEMENT TO DEVELOP A JOINT GAME PLAN FOR

    9

    A game plan presents an outline of key actions throughout the investment cycle. It allows effective and structure way of working by breaking down and executing goals step-by-step. A key aspect of the game plan is to get alignment between the shareholders and management.

    Creating a game plan enables investors and management to:

    o Reflect over what initiatives should be prioritized and at what stage of the investment

    o Create transparency and alignment between the owners and management

    o Monitor progress and current state of the investment

    A good game plan should include:

    o A well thought out vision for the investment

    o Realistic and measurable initiatives in prioritized sequence

    o Responsibility and ownership of the initiatives

    o Start and completion date for the initiatives

    o Milestones to be achieved

    Why Do We Need a Game Plan?

  • INVESTMENTS IN 2017

    10

    nyama world

    Marginpar

    Group

  • GROWTH PLATFORMS

    11

    nyama world

    Beef

    Tropical Fruits

    Cut Flowers

    Marginpar

    Group