Source: SNS Asset Management.
Den Bosch, November 12 – SNS Asset Management has closed its second institutional microfinance fund with a commitment of more than USD 171 million (€ 113 million). This second fund is – in common with the first fund – founded exclusively for institutional investors. The SNS Institutional Microfinance Fund invests in microfinance projects in developing countries and emerging economies via microfinance institutions (MFIs). It offers institutional investors the possibility to invest in microfinance and achieve good returns both from a financial and social perspective.
Theo Brouwers, director SNS Asset Management: “With the launch of this second microfinance fund we also felt the consequences of the financial crisis. We have noticed that despite the large interest in microfinance, the decision process needs more time. And there are also parties that have postponed their participation until peace on the financial markets has been restored. Nevertheless, we have succeded in receiving commitments from reputable parties, and we have exceeded our target of USD 52 million (€ 100 million).”
Considering the growing interest in microfinance among institutional investors and the growth in borrowing requirement on the part of MFIs, SNS Asset Management has decided to reopen the fund for a second closing that will take place in the first quarter of 2009, dependent on the financial markets.
Need
The second SNS Institutional Microfinance Fund is founded to satisfy the investors’ needs to gain exposure on this fast growing market on the one hand, and the MFIs’ enormous demand of capital on the other hand. The excellent performance of the first microfinance fund can be allocated as an explanation for the success, as well as the supposed low correlation of microfinance. Microfinance deals with investments in the informal economy where the payment ethics are more important than the rates on the financial markets. This moral standard is also demonstrated in the excellent reimbursement ratios of the past months. “Right at this moment, when investments in Emerging Markets and local currencies are withdrawn, the demand for capital among MFIs is even larger. The growth and performance of MFIs continues to be good, but the availability of capital decreases correspondingly. Therefore, I am extra proud of this success”, says Theo Brouwers. “Thanks to this fund we can once again help more than 1 million entrepreneurs to achieve a higher standard of living.”
Cooperating parties
SNS Asset Management is an asset manager for institutional investors and is a part of SNS REAAL, a large financial service provider in the Netherlands. SNS Asset Management N.V. has total assets under management of USD 28 billion (EUR 22 billion).
SNS Asset Management is a pioneer in the area of responsible institutional asset management of which
investing in developing countries through microfinance is an important part. With this second microfinance fund SNS Asset Management has strengthened his position worldwide as one of the leading parties in this area.
SNS Asset Management has appointed DWM Asset Management LLC, a member of the Developing World Markets group, as investment manager for the fund. DWM has global experience in granting loans and other financial instruments to microfinance institutions. DWM also is the investment manager for the first SNS Institutional Microfinance Fund. SNS Asset Management holds a 10 percent participation in DWM.
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