SocialAlpha-Bastion

SocialAlpha-Bastion is an open-ended impact debt fund launched in Luxembourg in August 2009, advised by AlphaMundi, and invested in Latin America and East Africa. The fund finances early- and growth-stage sustainable SMEs in smallholder agriculture, rural microfinance, rural household renewable energy access, with pilot allocations to affordable education and affordable housing. Since inception, the fund has financed 27 social ventures across 6 sectors and 15 countries with 8 full loan amortizations to date. The fund is a GIIRS Pioneer Fund recognized as Best for the World in 2016 and 2017 and ranked 2nd of rated emerging market impact funds. The fund was open to new investors in April 2014 with quarterly reporting and the right to redeem 25% of assets every 6 months. The Fund opened to US investors in October 2017. USAID announced in November 2014 a 7-year, USD 20m loan guarantee facility for the fund's loans to poor household technology providers. Swiss private bank Lombard Odier became the fund's first institutional investor in the fund on 31 March 2015, with a USD 1.5M commitment, followed by a USD 5M commitment from a Swiss pension fund.

Financial description

SocialAlpha-Bastion targets a net IRR of 3-5%. The fund focuses on early- and growth-stage social businesses that are either profitable or within 12-18 months of profitability, with solid management and a strong scale up potential, as well as high direct impact through their main products/services. Bastion increases exposure progressively, rewarding best portfolio performers, and strictly adheres to its diversification policies. Quarterly risk, financial and impact reporting to investors. LPs can redeem 25% of assets every 6 months, and co-invest the same amount they've invested in the fund in portfolio companies, at 50% of fees. Up to 20% of AUM in equity-related instruments, to increase upside exposure for best performing portfolio companies, adding to fund performance upon divestment.