MICROCAPITAL BRIEF: BlueOrchard Private Equity Fund Acquires 20% Stake in Microfinance Holding Company CHF Development Finance International, Focus to be on Middle East

The BlueOrchard Private Equity Fund (BOPE Fund), a microfinance investment vehicle managed by Switzerland’s BlueOrchard, recently acquired a 20 percent stake in US-based CHF Development Finance International, a holding company established by development organization CHF International to own and manage CHF’s commercially-oriented microfinance subsidiaries. BOPE Fund’s subscription of USD 1.6 million represents a 30 percent premium over book value. The transaction strengthened CHF Development Finance International’s capital structure and allows it to have seed capital to enter new countries and expand its services.

CHF International Vice President for Development Finance Elissa McCarter said, “BlueOrchard shares our commitment to responsible finance and to generating both financial and social returns by meeting the financial needs of low and medium-income clients. They have shown needed flexibility during this early stage investment in recognition of the challenging environments in which we work, particularly in the Middle East, which is a region of focus for the company.”

Between September 2009 and March 2011, CHF worked in 29 countries. CHF reported net assets of USD 101 million as of September 2010.

As of December 2010, BOPE Fund has USD 195 million in total commitments from both institutional and individual investors.

By Kristha Abores, Research Associate

About CHF International (CHF):
CHF International (CHF) is an international development organization founded in 1952 that works in post-conflict, unstable and developing countries. CHF partners with communities in efforts to help them to improve and direct their lives and livelihoods. CHF is a politically neutral nonprofit organization. Between September 2009 and March 2011, CHF worked in 29 countries. As of September 2010, CHF reported net assets of USD 101 million. CHF Development Finance International LLC, a limited liability company registered in the US state of Maryland and majority-owned by CHF International, was created in September 2006 to house the commercial ownership of financial institutions in which CHF has an equity position.

About BlueOrchard Private Equity Fund (BOPE Fund):
BlueOrchard Private Equity Fund (BOPE Fund) was registered in Luxembourg in December 2007 and acquires minority stakes in microbanks while aiming to play an active governance role at the board level. As of December 2010, BOPE Fund has USD 195 million in total commitments from both institutional and individual investors. BOPE Fund is managed by BlueOrchard, a Switzerland-based, commercial microfinance intermediary that provides loans to microfinance institutions through its subsidiary BlueOrchard Finance SA and invests in the equity of microfinance institutions and microfinance network funds through its subsidiary BlueOrchard Investments SA. BlueOrchard had approximately USD 860 million under management as of December 2010.

Sources and Additional Resources:

[1] Information submitted to by BlueOrchard to MicroCapital

MicroCapital.org article, October 24, 2011, “MICROCAPITAL BRIEF: Microfinance Investor BlueOrchard Releases 2011 Social Performance Data,”https://www.microcapital.org/microcapital-brief-microfinance-investor-blu…

MicroCapital.org article, May 11, 2011, “MICROCAPITAL BRIEF: BlueOrchard Invests $1m in Svasti Microfinance Private Limited of India,”https://www.microcapital.org/microcapital-brief-blueorchard-invests-1m-in…

MicroCapital Universe Profile: BlueOrchard Private Equity Fund (BOPE Fund), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=blu…

MicroCapital Universe Profile: CHF International, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CHF…

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