ACTIAM-FMO SME Finance Fund
Last updated 12 May 2020, by Impactyield.
The ACTIAM-FMO SME Finance Fund aims at channeling institutional investment capital to the SME sector in developing and emerging countries. It provides local financial institutions with debt funding to be used explicitly for financing the capital needs of the local SME sector. The Fund will be managed as an investment fund able to invest in a wide range of debt instruments. The debt instruments may include participations in senior loans and standard dated subordinated loans. Each Fund Investment invested in will have been chosen for inclusion in the Fund only after substantial due diligence has been performed by the Investment Manager, and after review and approval by the Fund Manager. The Investment Manager of the Fund is FMO, the Dutch triple A development bank.
The SME Finance Fund aims to build a well-diversified portfolio with exposure to at least 40 fund investments whereas fund investments will be made with a buy-and-hold philosophy. Next to striving for a solid financial return, it is the intention that the Fund’s investments shall add social and environmental value. The Fund explicitly aims to make responsible investments and to contribute to fostering a dynamic SME sector in emerging economies.
The annualized gross return of the Fund is targeted at EURIBOR + 4-7%, translating into EURIBOR + 3-6% on a net basis. To put return ambitions into perspective and taking into account that loans will generally be offered on a floating rate basis, the Fund uses an annualized benchmark return of 3-month EURIBOR + 3.5% on a net basis.
of track record
the year funded
ACTIAM Impact Investing
Headquarters location: Netherlands
Other funds managed by this asset manager: ACTIAM Institutional Microfinance Fund IIIACTIAM Institutional Microfinance Fund IIACTIAM Institutional Microfinance Fund I
Key performance indicators
Asset manager: ACTIAM Impact Investing
Product track record: Fund has 10 years of track record
Target IRR: n.a.
Committed Capital: n.a.
Target return category: Risk-adjusted market-rate of return
Fund domicile: Netherlands
Product status: Open - committed capital
Inception year: 2013
Vintage year: 2013
Target region: Emerging countries
Target close date: 01/11/2013
Product term: 10 year term
Assets under management: 300,000,000 EUR (Euro)
Investment size: Min: 1,000,000; Max: 4,000,000; Avg: 1,800,000
Co-investment policy: Only with LPs
Currency of investments: EUR (Euro)
Currency for fund / product figures: EUR (Euro)
Fund investments to date: 11
Fund investments to date exited or repaid: 0
Management fee: 0.75%
Carried interest: n.a.
Hurdle rate: n.a.
GIIN Investors' Council Investment: No
Limited Partners / Investors: n.a.
Limited Partner / Investor Type: Development Finance Institution (DFI), Family Office, Pension Funds, Other Institutional Investors
Phone number: 31302914218.00
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The SME sector is relatively underdeveloped in most developing and emerging economies. One of the most important factors that constrain SMEs’ further development is limited access to finance. Seventy percent of SMEs in emerging markets are still underserved, resulting in a funding gap of an estimated US$ 700-850 billion globally (McKinsey, 2010).
Next to a solid financial return, the Fund investments are intended to add social and environmental value. Screening financial institutions and their SME portfolios on environmental and social performance is an integral part of the investment selection process. In order to ensure that the Fund can measure and monitor the non-financial performance, the financial institutions underlying the Fund investments should commit themselves to assess, manage and report on social and environmental performance according to national law and the IFC Performance Standards.
The Fund Manager developed a Responsibility & Impact Framework to assess compliance with social and environmental criteria and to measure impact of each Fund investment.
The Fund measures the impact of the fund in terms of:
(1) Realisation of social-economic impact through facilitating (improved) access to finance for SMEs;
(2) Realisation of economic impact through employment creation and commercial sector development;
(3) Realisation of social impact through capacity building and quality improvement regarding responsible business development.
Community Investing/LocalFinancial InstitutionsInclusive FinanceLaborOtherSME Finance