GP Investors Report | Q4 | 2013

Social Investment Funds

INVESTORS REPORTFourth Quarter 2013 | Oct. 1 - Dec. 31, 2013

www.globalpartnerships.org

1932 First Avenue, Suite 400 | Seattle, WA 98101, USA | 206.652.8773 // De Enitel Villa Fontana 2c. Este, 30v. Norte | Edificio Opus Of. 205 | Managua, Nicaragua

Photo: An Emprender client gets her height

checked during a routine check up. © Emprender

For more information, contact:

Jason Henning, VP, Investor and Donor Relations

[email protected] | 206.456.7832

Featuring: Emprender on p.3

Online: See all partner profiles here

http://www.globalpartnerships.org


http://globalpartnerships.org

mailto:jhenning%40globalpartnerships.org?subject=

mailto:jhenning%40globalpartnerships.org?subject=

http://www.impactassets.org/ia50/fund.php?id=a01E000000CHJiQIAX

http://www.globalpartnerships.org/partners

| Letter from the CIOO |

11 COUNTRIESwhere Global Partnerships works

38 PARTNERSwith whom Global Partnerships works

134,324 PEOPLEserved by Global Partnerships through our partners

$57.5 MILLIONfund capital at work

Global Partnerships | Q4 2013 | As of Dec. 31, 2013 | Page 2

BY THE NUMBERS

February 14, 2014

Dear Investor,

Years ago, as an executive of a publicly traded company, I looked forward to earnings calls with investors and analysts. The company was performing well and each quarter’s news generated enthusiasm and gave a boost to the stock. The focus was normally backward-looking and new regulations required caution to avoid forward-looking statements. Investors were most interested in short-term financial results and what they might mean for the value of their investment.

The story is very different with impact investors. As an impact investor, Global Partnerships certainly has stewardship over the short-term results of our investments, as we know our investors expect careful due diligence and monitoring, and decisive action when trouble looms. We work very hard to have deep and updated knowledge about the

repayment profile of each of the underlying debt investments in the funds that we manage in order to deliver the financial return that you expected when making the investment.

At the same time, however, we cannot take our eyes off the larger social goal of providing opportunities with real impact for people living in poverty. In doing so, we adhere to a fairly strict definition of impact investing requiring intentionality, which was outlined in an article by the leadership of OPIC in the Stanford Social Innovation Review:

“investments with partners whose very business models aim to address social or environmental problems while generating sustainable financial returns.” The article contrasted this type of investment with ones which have a positive and even powerful development outcome, but which are undertaken strictly as an economic venture.

None of our investments are undertaken strictly as an economic venture, and our intent is always to support a business model that effectively addresses a social and/or environmental problem. Understanding the effectiveness of business models in addressing social problems is complex, and cannot be limited to measurement of outcomes. Rather, our approach seeks to understand (1) the context of the problem, or the unmet needs of people living in poverty, and (2) the activities undertaken to meet those needs, and (3) then measure the outputs, or products and services provided. This does not mean that we ignore outcomes or evidence that the outputs may have caused certain outcomes; rather, we recognize that quantitative output metrics alone may be inconsistent and lead to programs designed to produce selectively attractive numbers, much like those short term results that stirred up investor appetite back in my previous work.

In this report, we provide our “stewardship” of the short term results of our funds. Indeed, we are pleased that all of our investees are meeting their obligations as planned. But we also provide you a partner profile, so you can learn about context, activities, and outputs of one partner. We will continue to develop systems around impact measurement to help us ensure that we are effectively addressing social problems.

As always, thank you for your trust and support of our work.

Mark Coffey Chief Investment and Operating Officer



http://www.ssireview.org/blog/entry/creating_a_future_impact_investing_strategy

http://www.opic.gov/

http://www.ssireview.org

Bolivia is one of the poorest countries in Latin America. Roughly

60% of the population lives in poverty. An estimated

70% lacks access to regular health services.

| Featured Partner: Emprender |


WHO Emprender is a nonprofit Bolivian microfinance institution (MFI) that provides individual and group loans to predominantly female entrepreneurs. Understanding the connection between poverty and poor health, Emprender integrates its credit program with access to essential health education and services.

WHAT With the provision of debt capital, GP is helping Emprender scale its delivery of preventive health education and critical services. Education topics, delivered through the village bank channel, range from breast cancer detection and prevention to nutrition and women’s health. Emprender also manages three clinics, where an on-staff physician delivers critical services such as prenatal care, diabetes screenings and hypertension care. When necessary, Emprender uses market linkages to provide clients with access to discounted medicines.

WHY Preventive health education and regular screenings help people living in poverty make informed health decisions, change harmful behavior and detect treatable conditions. GP believes the village bank model can be leveraged effectively to deliver appropriate health education and screening to people living in poverty, particularly rural and underserved populations. Access to such services leads to both improved family health and reduced health-related costs, and can be delivered by MFIs in a low marginal cost, sustainable way. GP will continue to invest in partners, such as Emprender, that integrate health services with their credit products to break the cycle of poor health and poverty.

Country: BoliviaYear Founded: 1997

Number of Employees: 154 Number of Borrowers: 8,554 Outstanding Loan Portfolio: $8,193,912 Average Loan Size Per Borrower: $958 Percent Rural: 21%

An Emprender client gets her blood pressure checked. Photo © Emprender.

Click to see all partner profiles online.

http://www.globalpartnerships.org/our-investments/our-partners/



| Microfinance Fund 2008 |


Fund Manager’s Comments

Partner performance remains strong and all entities in Microfinance Fund 2008 (MFF 2008) continue to make principal and interest payments in a timely manner. Generally speaking, partners continue to show responsible growth, expected earnings, and consistent balance sheet strength. Each of the few partners that had more difficult financial results in 2013 remain well capitalized. Due to an accumulation of retained earnings in the fund, GP was able to deploy additional short-term capital to an existing partner, thus maximizing the impact of the fund. The fund matures in October 2014.

October 31, 2008Inception Date

$21,349,250Capital Invested

$20,000,000Total Fund Capital

18 $836 81% 44%

Fund Manager Global Partnerships

Investment CurrencyUS$ and fully hedged local currency

Type of FundDebt

Fund Facts

Social Impact

Current number of partners

Average loan size

Percentage of borrowers served who are women

Percentage of borrowers served living in rural areas

In thousandsTOTAL BORROWERS SERVED

300400500600

800

700

FY09 FY10 FY11 FY12 FY13

2008

90

120

150

Total revenues/total expenses as a %

AVERAGE OPERATIONALSELF SUFFICIENCY


Loans past due greater than 30 days as a %AVERAGE PAR >30

02468

10


Asset amount charged to loss as a %AVERAGE WRITEOFFS

0

1

2

3

4


US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO

200

400

600

800


GROWTH

PARTNER PORTFOLIO QUALITY

TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions

TOTAL BORROWERS SERVEDIn thousands

AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %

AVERAGE PAR > 30Loans past due greater than 30 days as a %

AVERAGE WRITEOFFSAsset amount charged to loss as a %

| Social Investment Fund 2010 |



The fourth quarter of 2013 saw considerable activity in Social Investment Fund 2010 (SIF 2010). During the quarter, the fund renewed or disbursed roughly $6.3 million in fund loans to nine existing partners. We expect this high level of activity to continue in the short-term as we work hard to identify mission-aligned investment opportunities that we can match with the scheduled fund maturities in October 2015 and June 2016, and to redeploy cash available as a result of scheduled amortizations and repayments. Performance remains strong with all partners continuing to make principal and interest payments in a timely manner. A few partners in Peru have experienced weaker credit quality, but in these cases the partners are well capitalized and we are monitoring them very carefully.

October 21, 2010Inception Date



30 $884

78%

55%



Type of FundDebt

Fund Facts


Average loan size



Social Impact


0200400600800

1000

FY11 FY12 FY13



90

120

150

FY11 FY12 FY13

Loans past due greater than 30 days as a %AVERAGE PAR >30

0

1

2

3

4

FY11 FY12 FY13


0

1

2

3

4

FY11 FY12 FY13


FY11 FY12 FY130

200

400

600

800

GROWTH







| Social Investment Fund 5.0 |



The fourth quarter of 2013 was busy with due diligence and new disbursements as the deployment of Social Investment Fund 5.0 (SIF 5.0) continues to pick up speed. At quarter end the fund had deployed almost $13.7 million to eleven mission-aligned partners in six countries. Three additional loans have been approved and are in the documentation stage and GP’s team remains busy building a robust pipeline of high-performance partners. The fund issued its third capital call in November and expects that the next capital call will likely occur in late March. The fund currently has $33.45 million in commitments from 34 impact investors and will continue to accept new commitments as it scales to meet its target fund size of $50 million.

March 25, 2013Inception Date



11 $1,271

71%

48%



Type of FundDebt

Fund Facts


Average loan size



Social Impact


060

120180240300

FY13

2008

90

120

150



FY13

2008AVERAGE PAR >30Loans past due greater than 30 days as a %

0

2

4

6

8

10

FY13


0

1

2

3

4

FY13


0

80

160

240

320

400

FY13

GROWTH







Outstanding PositionsDistribution by Institution and Country


| |

Microfinance Fund 2008Percent of investable assets

Social Investment Fund 2010Percent of investable assets

Note: All percentages have been rounded to the nearest whole number.

BOLIVIA (23%)CRECER (9%)Pro Mujer in Bolivia (9%)FONDECO (5%)

ECUADOR (28%)FINCA Ecuador (9%)FODEMI (9%)Banco D-MIRO (5%)Fundación Alternativa (3%)Fundación Faces (2%)

EL SALVADOR (5%)ENLACE (5%)

GUATEMALA (3%)Friendship Bridge (3%)

HONDURAS (1%)COMIXMUL (1%)

MEXICO (10%)Vision Fund Mexico (3%)Pro Mujer in Mexico (7%)

NICARAGUA (14%)FDL (9%)Pro Mujer in Nicaragua (5%)

PERU (14%)Credivisión (6%)Pro Mujer in Peru (6%)Arariwa (2%)

CASH (<1%)

BOLIVIA (17%)Sembrar Sartawi (5%)IDEPRO (6%)CRECER (1%)FONDECO (2%)EMPRENDER (3%)

COLOMBIA (10%)Fundación Amanecer (4%)Contactar (6%)

DOMINICAN REPUBLIC (1%)Esperanza (1%)

ECUADOR (10%)ESPOIR (4%)Banco D-MIRO (3%)Fundación Faces (3%)

EL SALVADOR (4%)Fundación Campo (3%)ENLACE (1%)

HAITI (1%)Fonkoze (1%)


MEXICO (11%)CONSERVA (4%)Vision Fund Mexico (4%)Pro Mujer in Mexico (1%)CESMACH (1%) Triunfo Verde (1%)

NICARAGUA (8%)Aldea Global (0%) FDL (2%)MiCrédito (2%) Pro Mujer in Nicaragua (4%)

PERU (24%)ADRA (8%) Pro Mujer in Peru (4%)Crediflorida (3%)NORANDINO (6%)Arariwa (2%)APROCASSI (1%)

CASH (10%)

14% Peru

5% El Salvador3% Guatemala

1% Honduras

23% Bolivia

28% Ecuador

10% Mexico

14% Nicaragua

14% Peru

1% Dominican

Republic

8% Nicaragua

6% Honduras

17% Bolivia

10% Colombia

10% Ecuador

4% El Salvador

1% Haiti

11% Mexico

24% Peru

10% Cash

http://www.globalpartnerships.org/sections/ourpartners/ourpartners_interactive_map.asp


Outstanding PositionsDistribution by Institution and Country


| |

BOLIVIA (15%)FONDECO (6%)PRO RURAL (3%) Idepro (6%)

COLOMBIA (9%)Fundación Amanecer (9%)

ECUADOR (33%)Banco D-MIRO (12%)ESPOIR (9%)FODEMI (6%)Fundación Alternativa (6%)

EL SALVADOR (6%)Fundación Campo (6%)


All FundsPercent of investable assets

MEXICO (12%)Pro Mujer Mexico (12%)

CASH (15%)

6% Colombia

<1% Haiti

<1% Dominican

Republic

5% Honduras

1% Guatemala

14% Peru

8% Nicaragua

19% Bolivia

23% Ecuador

11% Mexico

5% El Salvador

8% Cash

Note: All percentages have been rounded to the nearest whole number.

BOLIVIA (19%)

COLOMBIA (6%)

DOMINICAN REPUBLIC (<1%)

ECUADOR (23%)

EL SALVADOR (5%)

GUATEMALA (1%)

HAITI (<1%)

HONDURAS (5%)

MEXICO (11%)

NICARAGUA (8%)

PERU (14%)

CASH (8%)

Social Investment Fund 5.0Percent of investable assets

15% Bolivia15% Cash

12% Mexico

6% El Salvador

7% Honduras

9% Colombia

33% Ecuador



Documents

GP Investors Report | Q4 | 2013