MICROCAPITAL STORY: Triodos Bank in The Netherlands Announces Launch of the Triodos Microfinance Fund with EUR 22m in its First Close

Triodos Bank based in The Netherlands announced the launch of the Triodos Microfinance Fund, a new fund that would aim to increase access to financial services for the working poor in developing countries. According to a press release on the bank’s website, the fund was launched with a total investment of EUR 22 million in its first close. Investors include the Netherlands-based insurance company Achmea, the largest fund manager for charities in the UK CCLA Investment Management Ltd. and the UK-based independent grant-making foundation The Waterloo Foundation. Triodos will meet the need for new capital from its existing microfinance partners as well as new partners experiencing strong growth in demand for financial services from low-income population. According to the press release, Triodos is planning a launch to individual investors shortly. The fund is open for institutional investors across Europe. Triodos bank expects the new microfinance fund to grow to EUR 100 million by the end of 2009 and EUR 200 million by 2011.

As per information available on the new fund’s investment policy, 80 percent of investments will be towards established microfinance institutions (MFIs) with proven track record and the remaining 20 percent on start-up MFIs. The expected allocation would be 30 percent equity and 70 percent debt. The geographic scope of the fund would be the Latin American, African, Asian and Eastern European regions.

The Triodos Microfinance Fund is a sub-fund of Triodos SICAV II, a Luxemburg based investment fund created within the Triodos Bank which serves as an ‘umbrella fund’ (p2) offering shares of several separate funds to investors. Triodos SICAV II and its sub-funds are supervised by the Luxembourg regulator, Commission de Surveillance du Secteur Financier (CSSF). The Triodos Microfinance Fund is open-ended in structure where the fund is equitably divided into shares whose prices vary in direct proportion to variation in the fund’s net asset value. As per the press release, the fund is traded on a monthly basis.

The Triodos Bank was officially founded in 1980 with EUR 540,000 in share capital. Since then, the bank has provided private banking services as well as created various investment funds, financing social development worldwide. Triodos Bank is divided into three parts: national branches, investment banking and private banking. The investment banking division of Triodos is managed by Triodos Funds Management and Triodos Investment Management, the latter of which handles microfinance investments. According to its 2007 Annual Report, Triodos Bank had total assets of EUR 1.8 billion (USD 2.3 billion).

Triodos Investment Management BV is responsible for managing different Dutch and international funds that invest in developing countries. Triodos Investment Management is a 100% subsidiary of Triodos Bank and its investment sectors include microfinance, sustainable trade, renewable energy, sustainable real estate and culture. Total assets under management for Triodos Investment Management amount to EUR 1.2 billion. As of date, Triodos has totally four funds dedicated to microfinance: The Hivos-Triodos Fund Foundation, Triodos-Doen Foundation, Triodos Fair Share Fund and Triodos Microfinance Fund.

Triodos-Doen was formed in 1994 as a partnership between Triodos Bank of the Netherlands and the Doen Foundation. It invests in microfinance institutions in the form of loans and equity investments.  With a total assets reported as EUR 48.6 million (USD 62 million) at the end of 2007, they support the growth of the microfinance sector on a global scale.

The Hivos-Triodos Fund Foundation, founded in 1994, is a joint initiative of the Humanist Institute for Development Cooperation (HIVOS) and the Triodos Bank. Although the Hivos-Triodos Fund is managed by Triodos Investment Management BV, it is supervised by a supervisory board appointed by Hivos. Total portfolio as of 30 June 2008 is EUR 37.6 million.

The Triodos Fair Share Fund was established in 2002 as a closed mutual fund to provide finance in the form of loans and equity to sustainable microfinance institutions. The fund invests globally in developing countries with a mission to give financial access to the poor. Total portfolio as of June 30, 2008 is EUR 46.1 million.

By Bharathi Ram, Research Assistant

Press Release: Triodos Microfinance Fund Launched

Triodos Bank: Home , The Hivos-Triodos Fund Foundation, Triodos-Doen Foundation, Triodos Fair Share Fund, Triodos Microfinance Fund,
2007 Annual Report

MicroCapital.org:
September 10, 2007: WHO’S WHO: Tridos Bank

Similar Posts: