Truestone Impact Fund LP

Truestone Impact Fund LP invests on a global basis and across impact sectors such as sustainable agriculture, SME finance, banking, microfinance, sustainable forestry, social housing, healthcare, renewable energy and water and waste management mainly in developing nations.

The Fund focuses on private equity and private debt to SMEs, mostly in frontier markets through our Local Investment Partners who operate on the ground, providing local expertise, deal flow and ongoing mentoring and monitoring of investments. The Fund invests in businesses that demonstrate measurable social and/or environmental benefits, good governance practices and aims to deliver attractive risk adjusted returns. The investment process integrates impact analysis with traditional financial analysis to ensure genuinely impactful investments.

The fund targets an approximate 50/50 split in debt and equity investments for a blended annual return of 12% plus an annual distribution of 3%. The term of the fund is five years plus two optional two year extensions.

Impact metrics are recorded from investees on a regular quarterly basis in an IRIS compatible framework which is then assured by an independent auditor, currently Deloitte on an annual basis and published in the public domain.

Financial description

The fund's financial strategy is to generate 12% per annum over a 5 to 9 year period through investing in private equity and private debt in SMEs. In addition the fund aims to make annual distributions of 3% from the debt element of the portfolio.
We aim to balance the higher risk/return ratio traditionally associated with private equity investments in developing markets with lower but more stable returns from private debt.
Truestone works with Local Investment Partners in key geographies, who add the extra security of local knowledge and understanding, so important in selecting the strongest SME opportunities to support financially and nurture through to their full potential. Our key markets are Africa, South East Asia and Former Soviet Central Asia. Strong ties exist with local investment partners such as Uberis Capital, A Call to Business Trading Limited and Briken Limited. These businesses will use their local contacts and knowledge to identify SMEs and other opportunities with the potential to succeed financially and generate positive impact for local communities.
Regional weightings are applied driven by opportunity set and expected economic environment, whilst limits are also applied at business, country and region level to balance the risk taken on.
The fund invests across all impact sectors, as defined by IRIS.