Launch of a fully operational Luxembourg domiciled SICAV-SIF umbrella investment company with a perpetual life investing Tier 1 and Tier 2 capital of sustainable financial institutions globally. A first close was achieved on 12 February 2015, with 21 investors and total commitments of more than $40m. The fund was launched without public funding support.
Successful execution of the transaction resulted in a follow-on contract for Enclude as exclusive placement agent for the next 5 years.
SFRE (pronounced “Sapphire”) will enable sustainability-focused financial institutions (“SFIs”) around the globe to expand in number and grow in scale as key players in building more inclusive and sustainable local economies. These SFIs finance real economy enterprises and entrepreneurs who, in turn, create jobs, produce goods and services, ensure clean water, and promote solar energy and sustainable waste management. SFRE’s portfolio management process will be managed by its CEO and MicroVest Capital Management, LLC, using a proprietary scorecard developed by the GABV to measure and assess the alignment of any bank’s activities with the GABV’s Principles of Sustainable Banking. A triple bottom line approach is at the heart of SFIs’ business models (economic resiliency, environmental regeneration, and social empowerment – prosperity, planet and people).
Development of the fund’s objectives and initial design of the overall structure
Finalisation of the legal structure and development of the governance structure for the vehicle (in conjunction with legal counsel)
Leading and execution of the search for a CEO for SFRE, as well as for non-executive directors and Investment Committee members
Management of selection process of all third-party service providers (portfolio manager, AIFM, depositary, etc.) through the preparation of complete proposal request procedures and the creation of a framework of criteria to facilitate decision making
Drafting all investor marketing materials as well as fund policies and procedures
Formulation of initial investment strategy and eligibility criteria for financing by the vehicle, including criteria as to adherence to sustainable banking principles
Identification of profile pipeline of potential investees for the development of the financial model
Raising capital, including identifying and approaching investors, managing due diligence, Q&A and documentation processes
Management of successful first closing with continued marketing efforts appropriate for an open-ended investment vehicle
Grounding a robust investment strategy in performance data and market opportunity is key for success
Structuring of the capital needs to reflect the purpose of deploying the capital – “what are we solving for”? In this case, SFRE was established as an open-ended global vehicle for growth capital as this is at once the need and the opportunity of a growing segment of banks serving the real economy
Navigating the regulatory environment is important, especially in the context of the newly implemented European Directive for Alternative Investment Managers (“AIFMD”)
Reaching different types of investors is a high-touch process that requires persistence and informed market understanding