MICROCAPITAL BRIEF: Unitus Equity Fund Investment in SKS Microfinance Valued at $60m, Partial Exit Expected This Week

Unitus Equity Fund, a privately-funded microfinance investment fund affiliated with Unitus Inc., a United States-based nonprofit, is reportedly expected to reduce its shareholdings in SKS Microfinance this week by selling approximately 1 million shares during SKS Microfinance’s initial public offering (IPO), which has been covered by MicroCapital several times since March 29, 2010. SKS Microfinance is an Indian microfinance institution serving impoverished women which has total assets of USD 596 million at March 31, 2009.

Unitus Equity Fund reportedly owns a total of approximately 3.7 million shares in SKS Microfinance, which – priced at about USD 16 per share – results in a total value of USD 60 million, which compares nicely to the fund’s initial investments made between 2006 and 2008 that total USD 6 million.

As reported by MicroCapital on July 8, 2010, Unitus Inc. has announced that it plans to discontinue its microfinance activities, which has led to concerns in some circles regarding the fate of charitable funds provided to Unitus Inc. by donors. Unitus Inc.’s operations consist of both a nonprofit microfinance organization as well as the for-profit investment fund Unitus Equity Fund.

By Jennifer Shevock, Research Associate

About SKS Microfinance:
SKS Microfinance is an Indian microlender that delivers microfinance products through a group lending model to impoverished women in India. It is a for-profit non-banking finance company which converted to a public limited company in May 2009. Equity investors include Quantum Hedge Fund, Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus. Its total assets as of March 31, 2009, were USD 596 million with 3.5 million active borrowers, and it reported return on assets of 3.68 percent and return on equity of 18.72 percent.

About Unitus Equity Fund:
The Unitus Equity Fund is affiliated with Unitus Inc. and managed by Elevar Equity, and was established to encourage the development of a commercial equity market needed to serve the microfinance industry. The fund seeks to earn a return commensurate with risk while investing in organizations working to alleviate poverty. Total committed capital when the fund opened in 2006 was USD 24 million. No current financial information is available for Unitus Equity Fund.

About Unitus Inc.:
Unitus Inc. is an international nonprofit organization based in the United States that originally aimed to accelerate the growth of microfinance to alleviate poverty. As of July 2010, Unitus is planning to refocus its efforts away from microfinance toward other unspecified “poverty-focused philanthropic activities.” As of 2008, Unitus worked with 23 microfinance institutions in India, Southeast Asia, East Africa, South America and Mexico. Unitus also participates in the Unitus Equity Fund, which is managed by Elevar Equity Advisors. As of 2009, Unitus had total assets of USD 19.4 million.

Sources and Additional Resources:
“Unitus Equity Fund to Receive an Estimated Return of US$70 million From SKS Investment” July 26, 2010. http://www.microfinancegateway.org/p/site/m/template.rc/1.1.5828/

MICROCAPITAL BRIEF: “Quantum Hedge Fund Managed by George Soros Invests in India’s SKS Microfinance, Whose Initial Public Offering (IPO) is Imminent” July 26, 2010.
https://www.microcapital.org/microcapital-brief-quantum-hedge-fund-managed-by-george-soros-invests-in-india%E2%80%99s-sks-microfinance-whose-initial-public-offering-ipo-is-imminent/#more-6134

MICROCAPITAL BRIEF: “India’s SKS Microfinance Sets Price for Pending IPO, Offers Discount to Retail Investors” July 22, 2010. https://www.microcapital.org/microcapital-brief-india%E2%80%99s-sks-microfinance-sets-price-for-pending-ipo-offers-discount-to-retail-investors/#more-6053

MICROCAPITAL BRIEF: “Upcoming Initial Public Offering (IPO) of SKS Microfinance Rated as Grade 4/5 By Credit Analysis and Research Limited (CARE Ratings)” July 19, 2010.
https://www.microcapital.org/microcapital-brief-upcoming-initial-public-offering-ipo-of-sks-microfinance-rated-as-grade-45-by-credit-analysis-and-research-limited-care-ratings/

MICROCAPITAL BRIEF: “SKS Microfinance, a Microfinance Institution (MFI) in India, Announces Intentions to Sell Shares From July 28 to July 30” July 13, 2010. https://www.microcapital.org/microcapital-brief-sks-microfinance-a-microfinance-institution-mfi-in-india-announces-intentions-to-sell-shares-from-july-28-to-july-30/

MICROCAPITAL BRIEF: “Indian Microfinance Institution SKS Microfinance Receives Initial Public Offering (IPO) Approval from Securities and Exchange Board of India” July 13, 2010.
https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-sks-microfinance-receives-initial-public-offering-ipo-approval-from-securities-and-exchange-board-of-india/

MICROCAPITAL BRIEF: “Unitus to Discontinue Microfinance-Related Activities to Focus on Other Poverty Alleviation Strategies, Will Release 40 Staff Members in India, Kenya, United States” July 8, 2010. https://www.microcapital.org/microcapital-brief-unitus-to-discontinue-microfinance-related-activities-to-focus-on-other-poverty-alleviation-strategies-will-release-40-staff-members-in-india-kenya-united-states/

MICROCAPITAL BRIEF: “India’s SKS Microfinance IPO Could Trigger Trend in Microlending” June 16, 2010. https://www.microcapital.org/microcapital-brief-indias-sks-microfinance-ipo-could-trigger-trend-in-microlending/

MICROCAPITAL BRIEF: “Initial Public Offering (IPO) of India-based Microfinance Institution (MFI) SKS Microfinance Raises Questions about Ethics within the Industry” April 13, 2010. https://www.microcapital.org/microcapital-brief-initial-public-offering-ipo-of-india-based-microfinance-institution-mfi-sks-microfinance-raises-questions-about-ethics-within-the-industry/

MICROCAPITAL BRIEF: “SKS Microfinance Limited, Microfinance Institution (MFI) in India, Files to Raise $250m in Initial Public Offering (IPO)” March 29, 2010. https://www.microcapital.org/microcapital-brief-sks-microfinance-limited-microfinance-institution-mfi-in-india-files-to-raise-250m-in-initial-public-offering-ipo/

MICROCAPITAL BRIEF: “SKS Microfinance, a Microfinance Institution (MFI) Based in India, Expected to File for Initial Public Offering (IPO) in Next Four Weeks” March 9, 2010. https://www.microcapital.org/microcapital-brief-sks-microfinance-a-microfinance-institution-mfi-based-in-india-expected-to-file-for-initial-public-offering-ipo-in-next-four-weeks/#more-4531

MICROCAPITAL STORY: “SKS Microfinance Plans for India’s First Microfinance Institution’s (MFI) Initial Public Offering (IPO), Managed by Citigroup, Credit Suisse and Kotak Mahindra Capital” October 12, 2009. https://www.microcapital.org/microcapitalorg-story-sks-microfinance-plans-for-india%E2%80%99s-first-microfinance-institution%E2%80%99s-mfi-initial-public-offering-ipo-managed-by-citigroup-credit-suisse-and-kotak-mahindra/#more-3815

MicroCapital Universe: SKS Microfinance: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance

MicroCapital Universe: Unitus Inc.: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Unitus+Inc.#Description

MicroCapital Universe: Unitus Equity Fund/Elevar Equity: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Unitus+Equity+Fund+I

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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