Adobe Social Mezzanine Fund I, LP
Last updated 12 May 2020, by Impactyield.
Adobe Capital is the first triple bottom line impact investment fund focused on supporting the early growth of social and sustainable SMEs in Mexico.
The Fund focuses mainly on providing quasi-equity or mezzanine investments (from US$100,000 to US$3 million) to high-impact SMEs. The Fund’s investment structures ensure pre-defined, debt-like exits, without foregoing any equity-like upside, while providing portfolio companies with capacity building and technical support to continue pursuing their deep social missions.
Equal rights to ownership basic services technology and economic resources
Encourage companies to adopt sustainable practices and sustainability reporting
Expand and upgrade energy services for developing countries
Promote policies to support job creation and growing enterprises
Increase access to financial services and markets
Key performance indicators
Asset manager: Adobe Capital
Product track record: Fund has 11 years of track record
Target IRR: 20%
Committed Capital: 15,500,000 USD (US Dollar)
Target return category: Risk-adjusted market-rate of return
Fund domicile: Mexico
Product status: Closed - still investing
Inception year: 2011
Vintage year: 2013
Target close date: n.a.
Product term: 10 years
Assets under management: 22,000,000 USD (US Dollar)
Investment size: Min: 100,000; Max: 3,000,000; Avg: 1,500,000
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 7
Fund investments to date exited or repaid: 0
Management fee: 3%
Carried interest: 20%
Hurdle rate: 8%%
GIIN Investors' Council Investment: Yes
Limited Partners / Investors: DEG, Corporacion Andina de Fomento (CAF), Calvert Investments, US Family Office, Avina Foundation, Halloran Philanthropies, Mexico Ventures, KL Felicitas Foundation and Promotora Social Mexico
Limited Partner / Investor Type: Development Finance Institution (DFI), Endowments/Foundations, Family Office, Other Institutional Investors
Small and Medium Enterprises (SMEs) have significant potential to drive economic growth and innovation in developing markets. Additionally, many SMEs pursue triple bottom line returns and as such play a critical role in helping to solve important global challenges such as poverty reduction and climate change.
Despite their impact potential, SMEs in developing countries face significant constraints in accessing capital. This “missing middle” in terms of both debt and equity financing exists as their average capital requirement is too small and risky for commercial banks and private equity players, but too big for microfinance institutions. The Fund will thus invest in Mexican SMEs which have adopted innovative business models focused on commercializing environmentally friendly products and/or alleviating poverty by serving low-income, BoP communities.