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This is the Investors Report for the fourth quarter of 2014, covering investment activity between Oct. 1 - Dec. 31, 2014.
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Global Partnerships
INVESTORS REPORTFourth Quarter 2014 | Oct.1 - Dec. 31, 2014 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
For more information contact:
Jason Henning, VP, Investor and Donor Relations
[email protected] | 206.456.7832
Featuring: APROCASSI on p.3
Now Online: Your financial statements
| Letter from the CIOO |
12 COUNTRIESwhere Global Partnerships has worked
78 PARTNERSwith whom Global Partnerships has worked
2.9 MILLION LIVES IMPACTED (an estimate number of lives impacted as a result of GP’s contribution to the meaningful opportunities delivered by partner organizations)
$154.3 MILLIONcumulative capital deployed
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 2
BY THE NUMBERS
February 13, 2015
Dear Investor,
Worldwide about 500 million small-scale farmers, most of whom live in rural poverty, need access to financing, training and markets in order to improve their lives. Reaching these farmers has always been important for Global Partnerships.
In 2011, we started expanding our Rural Livelihoods initiative when we began financing various agricultural cooperatives, along with certain savings and credit cooperatives that work primarily with farmers. This type of financing has been fruitful for our funds, in that all of the loans made to date have performed according to terms.
But more importantly, our investments have enabled our partners to deliver impact at the farmer household level through their provision of:
• access to fair trade and specialty product markets, with attendant pricing advantages, • technical assistance from the cooperatives to the farmers, • value-add processing at the cooperative level, and• credit, primarily in the form of working capital loans.
Challenges have presented themselves along the way, with the most obvious being the devastating coffee rust that has ravaged crops, particularly in Central America, Mexico and Peru. Our partners have been managing through that challenge admirably, and our team has worked hard to identify great partners and to stay in close touch with them.
Perhaps a larger challenge from an impact standpoint is how to scale our work to greater numbers of small-scale farmers. In researching the best way to do this, we have studied a number of organizations that we call “outgrowers,” who provide many of the same services as a cooperative, but on a much larger scale. We are interested in outgrower organizations that work with small-scale farmers (usually 1-10 hectares in Latin America) to:
• provide technical assistance, • introduce farmers to higher-value crops, and • provide credit in the form of seeds or other materials.
These organizations also provide processing and export services, and work to develop markets for high-value and emerging products. Our recent work in Guatemala and entry into Paraguay (in the first quarter of 2015) have focused on outgrowers that provide technical assistance on crops such as sesame and chia, and then export these products to high-demand developed markets in Asia, Europe and North America. In future additions of this report, we will profile one of these partners.
Within this report we profile a Peruvian agricultural cooperative, APROCASSI. We are now in our fourth annual cycle of working with this excellent organization to improve the lives of small-scale coffee farmers in the northern zone of the country. Our investment funds maintain diversification between various sectors of the economy, but small-scale agriculture is likely to remain an important sector because of its important impact on the quality of life of the rural household.
Thank you for making this work possible.
Mark Coffey Chief Investment and Operating Officer
APROCASSI operates in Cajamarca, Peru, where over half the population lives below the poverty line.
Country: PeruYear Founded: 2000Number of Employees: 15
Number of Borrowers: 410Outstanding Loan Portfolio: $1.1MM Average Loan Size Per Borrower: $2,726 Percent of Rural Clients: 100%
| Featured Partner: APROCASSI |
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 3
WHO APROCASSI is a 100% fair trade certified coffee cooperative dedicated to improving the quality of life of small producers in northern Peru. In order to further its mission, APROCASSI founded APROCREDI, a rural savings and credit cooperative that provides members with access to pre-harvest credit as well as longer term loans for plant rejuvenation and general household needs between harvests.
WHAT APROCASSI provides its members with technical assistance, commercialization, and education services. The cooperative supports farmers in obtaining necessary certifications, negotiating contracts, processing, marketing and exporting the coffee.
Ultimately members are able to capitalize on improved crop practices by gaining access to specialty markets where they can obtain better prices. Access to credit and savings via APROCREDI allows farmers to maintain their households between harvests and periodically replace their crop with new plants to maintain high yields of quality product.
WHY Cajamarca, Peru, where the cooperative operates, is the second largest coffee growing region in the country. In this region, over half of the population lives below the national poverty line. Global Partnerships invests in APROCASSI because it provides small-holder farmers with a complete selection of services that broadly support the farmers from pre-harvest activities to selling their product in specialty markets.
With APROCASSI’s help, Zara is now a certified organic grower, which means she can charge 30 percent more for her coffee beans. Because of the training APROCASSI provides—such as one-on-one technical assistance and workshops—she has been able to improve her yields and the quality of her product, and thus her profits. Photo © Global Partnerships. Click to see all partner profiles online
| Social Investment Fund 2010 |
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 4
Fund Manager’s Comments
During the fourth quarter of 2014, the Fund disbursed seven loans and renewed two credits, for a total of just over $8 million of loan activity. SIF2010’s outstanding loan balances have now surpassed the Fund’s original committed capital of $25 million. With the end of the Fund less than 18 months away and with the first repayment of over $10 million due to investors less than 10 months away, loan activity will be limited to short-term renewals or short-term loans to our trade finance (cooperative) partners. In the fourth quarter of 2014, all principal and interest payments were once again made on time, reflecting the strength of the underlying investments.
$25.3MM Capital Invested
$25.0MM Total Fund Capital
$65.4MM Cumulative Capital Deployed
109 Cumulative Number of Loans
17 Number of Consecutive
Quarters PAR=0
651K Lives Impacted (an estimate number of lives impacted as a result of SIF 5.0’s contribution to the meaningful opportunities delivered by partner organizations.)
35Current Number of Partners
$959 Average Loan Size
77%Percentage of People Served Who are Women
59%Percentage of People Served Living in Rural Areas
Fund Overview
Inception DateOctober 21, 2010
Fund Manager Global Partnerships
Type of FundDebt
Investment CurrencyUS$ and fully hedged local currency
Portfolio Overview
In millionsTOTAL PEOPLE SERVED
00.20.40.60.81.01.2
FY11 FY12 FY13 FY14
Loans past due greater than 30 days as a %AVERAGE PAR >30
0
2
4
6
FY11 FY12 FY13 FY14
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY11 FY12 FY13 FY14
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
FY11 FY12 FY13 FY140
200400600800
1000
SCALE
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL PEOPLE SERVEDIn millions
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
As a %
0.57%
3.64%
FUND RETURN v. DURATION-MATCHED TREASURIES
0 1 2 34 5
Fund
UST
FUND RETURN v. DURATION-MATCHED TREASURIES
| Social Investment Fund 5.0 |
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 5
Fund Manager’s Comments
During the fourth quarter, the Fund disbursed $4.2 million to seven partners, including three partners new to GP. One of those, Greenlight Planet, is a manufacturer and distributor of solar powered home lights designed primarily for off-grid households. The purpose of our loan is to increase their distribution in Latin America and the Caribbean through enhanced credit terms to distributors in the region.
The Fund is continuing to accept new commitments from investors and we anticipate calling additional capital during the 1st quarter as we maintain a high-level of planned disbursement activity and as we begin our first renewals in the Fund. Meanwhile, all partners have made payments as agreed and all partners are aligned with one or more of GP’s impact areas.
$28.0MM Capital Invested
$31.5MM Total Fund Capital
$31.0MM Cumulative Capital Deployed
36 Cumulative Number of Loans
7 Number of Consecutive
Quarters PAR=0
154K Lives Impacted (an estimate number of lives impacted as a result of SIF 5.0’s contribution to the meaningful opportunities delivered by partner organizations.)
24Current Number of Partners
$1,099 Average Loan Size
59%Percentage of People Served Who are Women
72%Percentage of People Served Living in Rural Areas
Fund Overview
Inception DateOctober 21, 2010
Fund Manager Global Partnerships
Type of FundDebt
Investment CurrencyUS$ and fully hedged local currency
Portfolio Overview
As a %
0.95%
3.52%
FUND RETURN v. DURATION-MATCHED TREASURIES
0 1 2 3 4 5
Fund
UST
SCALE
PARTNER PORTFOLIO QUALITY
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
0
120
240
360
480
600
FY13 FY14
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
In millionsTOTAL PEOPLE SERVED
00.20.40.60.81.01.2
FY13 FY14
TOTAL PEOPLE SERVEDIn millions
AVERAGE PAR >30Loans past due greater than 30 days as a %
0
2
4
6
8
10
FY13 FY14
AVERAGE PAR > 30Loans past due greater than 30 days as a %
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY13 FY14
AVERAGE WRITEOFFSAsset amount charged to loss as a %
FUND RETURN v. DURATION-MATCHED TREASURIES
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 6
| |
Social Investment Fund 2010Percent of investable assets
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (20%)Crecer (4%)EMPRENDER (3%) FONDECO (2%)IDEPRO (6%)Pro Rural (1%)Sembrar Sartawi (4%)
COLOMBIA (1%)Fundación Amanecer (1%)
DOMINICAN REPUBLIC (<1%)Esperanza (<1%)
ECUADOR (16%)Banco D-MIRO (3%)ESPOIR (4%)Fundación Faces (3%)Vision Fund Ecuador (6%)
EL SALVADOR (9%)ENLACE (6%)CrediCampo (3%)
GUATEMALA (2%)Friendship Bridge (2%)
HAITI (1%) Fonkoze (1%)
HONDURAS (3%)COMIXMUL (1%)IDH (2%) RAOS (0%)
MEXICO (10%)CESMACH (1%) CONSERVA (4%)Triunfo Verde (0%) VisionFund Mexico (5%)
NICARAGUA (14%)Aldea Global (3%)FDL (3%)MiCrédito (4%) Pro Mujer in Nicaragua (4%)
PERU (24%)ADRA (8%)Alternativa (Peru) (2%) APROCASSI (<1%) Arariwa (<1%)Crediflorida (1%)FONDESURCO (3%)NORANDINO (3%) Pro Mujer in Peru (7%)
CASH (<1%)
3% Honduras
1% Haiti
<1% Dominican Republic1% Colombia
2% Guatemala
<1% Cash
20% Bolivia
16% Ecuador
24% Peru
14% Nicaragua
10% Mexico 9%
El Salvador
Region
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 7
| |
Social Investment Fund 5.0Percent of investable assets
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (24%)Emprender (5%)FONDECO (3%)Idepro (7%)PRO RURAL (3%)Sembrar Sartawi (6%)
COLOMBIA (2%)Fundación Amanecer (2%)
ECUADOR (22%)Banco D-MIRO (7%)ESPOIR (5%)Fundación Alternativa (5%)Vision Fund Ecuador (5%)
EL SALVADOR (3%)CrediCampo (3%)
GUATEMALA (9%)Fundea (7%)FECCEG/ECEG (1%) NEWProfasa (1%) NEW
HONDURAS (1%)COMIXMUL (1%)
MEXICO (12%)Pro Mujer Mexico (7%)Vision Fund Mexico (5%)
NICARAGUA (12%)FDL (3%)Fundenuse (2%)Pro Mujer in Nicaragua (7%)
PERU (8%) Cenfrocafe (1%) Pro Mujer in Peru (7%)
LATIN AMERICA REGION (3%)Greenlight Planet (2%) NEWTecnosol (1%)
CASH (8%)
24% Bolivia
12% Mexico
8% Peru
8% Cash
3% Latin
America
9% Guatemala12%
Nicaragua
3% El Salvador
1% Honduras
2% Colombia
22%
Ecuador
Region
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q4 2014 | As of Dec. 31, 2014 | Page 8
| |
All FundsPercent of investable assets
El Salvador
2% Colombia
<1% Haiti
<1% DominicanRepublic
2% Honduras6% Guatemala
15% Peru
13% Nicaragua
22% Bolivia
19% Ecuador
10% Mexico
6%
4%Cash
1% Latin America
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (22%)
COLOMBIA (2%)
DOMINICAN REPUBLIC (<1%)
ECUADOR (19%)
EL SALVADOR (6%)
GUATEMALA (6%)
HAITI (<1%)
HONDURAS (2%)
MEXICO (10%)
NICARAGUA (13%)
PERU (15%)
LATIN AMERICA REGION (1%)
CASH (4%)