On 20 November 2013, Zwitserleven, the Spoorweg pensioenfonds and the Pensioenfonds Openbaar Vervoer made a first deposit in the SNS FMO SME Finance Fund. SNS Impact Investing, part of SNS Asset Management, and the Dutch development bank FMO jointly initiated this fund. The fund aims at supporting local SME’s in developing markets. The fund has, in the meantime, received Euro 100 million in investments for a first close. It is expected that commitments will increase substantially in 2014.
Potential recipients of loans
The fund will provide loans to financial institutions aiming at supporting SME’s in developing markets worldwide. Through these investments, hundreds of SME’s will gain access to hardly available long term finance in the developing markets. Potential recipients of loans are entrepreneurs active in, amongst others, agribusiness, food and distribution, retail business, production and transportation.
Local investments
Special about the fund is that it invests, through local financial institutions, in small and medium enterprises. These financial institutions – mainly local banks – aim at investing in SME’s in their own region. According to Yvonne Bakkum, Director of FMO Investment Management, the reasons for investing through local banks are: “Local banks are best equipped to judge which socially relevant local companies can use finance. This approach also has efficiency benefits, as intensive support and control from the bank are required while financing small and medium enterprises with relatively small loans”.
Healthy returns
The investors in this fund are Dutch pension funds and – insurance companies. Theo Brouwers, Director of SNS Impact Investing: “They realize that their long term obligations are reaching beyond financial return, and are also investments in future generations. Naturally, the fund expects to realize a healthy financial return. It helps that the management fee and additional costs of the fund are relatively low”. Willem Horstmann, CFO of Zwitserleven, adds: “At Zwitserleven we are conscious of the expectations for the future of our customers – mostly companies that want to arrange the pensions of their employees in a responsible way. As a pension insurance company we want to make sure that returns on our investments are good and at the same time are adding social value. By also investing in developing markets we realize this responsibility.” Recognizable, according to Marcel Andringa, Director Asset Management of SPF Beheer: “Our customers the Spoorwegpensioenfonds and the Pensioenfonds Openbaar Vervoer strive for good investment results, while at the same time aiming at positive social impact of their investments. Through this initiative, both aspects are achieved in a special way”.
FMO and SNS: logical partners
FMO, the Dutch development bank and SNS Impact Investing are logical partners for this initiative. Both organisations strive to combine creating social impact with healthy financial returns. FMO fulfills the role in which it has already more than 40 years of experience: selecting and consequently managing investments in developing countries with a positive impact on the local economy. SNS Impact Investing, with a broad experience in investing for big institutional investors in the field of microfinance, fulfills the role of fund manager. For SNS and Zwitserleven, the expansion towards the SME in developing economies is a logical next step after the succesful microfinance funds. Together, FMO and SNS Impact Investing support whole-heartedly the further professionalization of the financial institutions in which they invest and will stimulate their economic and social role.
About SNS Impact Investing
SNS Impact Investing is the development investments entity of SNS Asset Management. Through ist professional funds it invests in social development all over the globe, and aims to combine a market rate return with a demonstrable contribution to a better world. SNS Impact Investing creates value for its clients, for the investees and for society by developing, promoting and/or distributing impact investment solutions. Impact investment solutions are typically accomplished by way of funds, but may also involve impact investment mandates and impact advisory services. www.snsimpactinvesting.com
About FMO IM
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy and agribusiness, food & water. With an investment portfolio of EUR 6.3 billion, FMO is one of the largest bilateral private sector development banks FMO Investment Management offers institutional investors access to FMO’s expertise in responsible emerging market investing. Our offering builds on over 40 years’ experience in sustainable investing in emerging and developing markets. http://www.fmo.nl/investment-management
