Responsible Investment Management and Advisory Services

Strengthening Our Pursuit of Financial Inclusion

Although holiday season has set in, there has been no lack of turmoil in emerging markets. However, we have also had to face some difficulties close to home. Events such as Brexit, Turkey and the tragedies in France have increased social tension to levels that we have become all too familiar with. Although it is certainly difficult to single out one specific cause of such events, most would agree that there is a certain causal relationship between prosperity and fair income distribution, and a secure and stable environment. If anything, these events have strengthened our pursuit to play our part in offering development opportunities to excluded segments of society.

In our efforts to promote financial inclusion around the world, our advisory services team has coordinated the study on “New perspectives on financing small cap SMEs in emerging markets: the case for mezzanine finance” which was officially launched at the Annual DFI/IFI Working Group on SME Finance 2016 in Rome this past May.

This study makes the case for mezzanine finance for SME’s in emerging markets to fuel critical job creation. The uniqueness of the study resides in providing an understanding of the risk/return profile derived from the combination of the risk associated with small SMEs, high transaction costs, limited upside and in many cases, FX uncertainty on the one side versus the prospect of regular, stable cash flows on the other side. This study is the first of its kind and represents a first step into spurring innovative thinking on both the fund managers and investors sides so products may be improved and more robust financing models may be established.

The next steps in financial ecosystem development across the globe may include facilitating the fusion of more sustainable and scalable models that work in other frontier regions.

We hope you enjoy reading our quarterly,
Steven Evers