First German Fund for Microfinance
Last updated 13 May 2020, by Impactyield.
The First German Fund for Microfinance (official legal name: VG Microfinance Invest Nr. 1) was launched in July of 2007 and was the world’s first externally rated securitization of subordinated microfinance loans. Investors subscribed to a total of € 60 million in bonds, in three tranches, including for the first time € 36 million by private clients of Deutsche Bank. The remainder of the fund was purchased by KfW (€20 Million) and Deutsche Bank (€4 Million). These subordinated loans helped 21 microfinance institutions to make an effective contribution in their fight against poverty by distributing at least 120,000 very small loans to micro entrepreneurs in over 15 developing countries.
VG Microfinance Invest NR. 1 GMBH was the first rated CLO of subordinated microfinance loans to be sold in Germany and the first application of structured finance methodology to microfinance, with the senior tranche of Euro 36 million being rated BBB by Fitch ratings.
Financing was made available through a private placement to private investors in Germany through Deutsche Bank Private Wealth Management.
of track record
the year funded
Headquarters location: United States of America
Other funds managed by this asset manager: Global Commercial Microfinance Consortium IIGlobal Commercial Microfinance Consortium IEye Fund I, LLCFINCA Microfinance Fund B.V.
Key performance indicators
Asset manager: Deutsche Bank
Product track record: Fund has 16 years of track record
Target IRR: n.a.
Committed Capital: n.a.
Target return category: Risk-adjusted market-rate of return
Fund domicile: Germany
Product status: Closed - no longer investing
Inception year: 2007
Vintage year: 2007
Target region: Emerging countries
Target close date: n.a.
Product term: 7 years
Assets under management: 59,760,000 EUR (Euro)
Investment size: Min: 0; Max: 0; Avg: 0
Currency of investments: EUR (Euro)
Currency for fund / product figures: EUR (Euro)
Fund investments to date: 20
Fund investments to date exited or repaid: 0
Management fee: 2%
Carried interest: n.a.
Hurdle rate: n.a.
GIIN Investors' Council Investment: Yes
Limited Partners / Investors: KfW, Deutsche Bank
Limited Partner / Investor Type: Development Finance Institution (DFI), Other Institutional Investors
Phone number: 212.250.0549
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The Fund offered subordinated debt to 21 microfinance institutions, thereby strengthening their capital level and enabling them to expand their portfolio. In some cases, the funding supported the MFI’s transformation to regulated entities. The fund disbursed to 21 MFIs operating in 15 countries. The geography includes the following regions, Latin America, Africa, Central Asia, Eastern Europe, South Asia and East Asia.