African Capital Markets News

Sub-Saharan African sovereigns outside SA to raise $7bn in fixed income

Tom Minney — Mon, 13 May 2013 08:30:49 +0000

African countries (apart from South Africa) are set to place $7 billion of debt this year, buoyed by low interest rates and a huge global appetite. According to this article in Bloomberg Businessweek by Roben Farzad, this year’s debt issues will be more than the previous 5 years combined and African capital markets are feeling the boom.
No wonder international investors who are “grabbing for yield and growth” (according to Farzad) are looking to Africa which the International Monetary Fund forecasts will grow at 5.6% this year against 1.2% in developed countries. But Africa’s terrible infrastructure, including electricity, bridges, roads and wastewater treatment, is costing African sat least 2 percentage points of growth. Some of the new bond proceeds are likely to go on infrastructure, which needs investments of up to $93 billion a year.
The article cites research from JP Morgan Chase that average yields on African debt fell 88 basis points in the past 12 months, to 4.35%. “Nigeria, Gabon, Ghana, Ivory Coast, Namibia, the Congo, Senegal, and the Seychelles have all seen their borrowing costs fall this year.”
“It’s a hugely exciting story,” Jim O’Neill, the chairman of Goldman Sachs Asset Management who plans to retire this year, said in an April 23 interview with Bloomberg Television in London, writes Bloomberg reporter Chris Kay: “The only thing one has to be a little bit careful of are many of those markets are still very undeveloped and suddenly there’s a lot of people around the world regarding Africa to be sort of fashionable and trendy.”
Farzad wonders how easy it will be to “service so much easy-money debt when the credit cycle turns, or if commodities and political stability decline. At least for now, though, you get the impression that sub-Saharan Africa has turned a corner in global capital markets.” And journalist Chris Kay quotes Charles Robertson, global chief economist at Renaissance Capital: “For governments, great, don’t look a gift horse in the mouth. I still don’t believe investors are getting risk-adjusted returns in the dollar-bond space.”
According to Kay, debt-forgiveness programmes have helped 45 African nations cut debt to about 42% of gross domestic product this year from an average 120% in 2000, according to data compiled by Bloomberg and IMF estimates. South Africa’s Finance Minister Pravin Gordhan says debt will peak at 40% of GDP in 2016, compared with more than 100% for the U.S. and an average 93% in the eurozone.
Another reason why Africa offers lower risk is that taxpayers have no expectations of massive social and other spending in nearly all countries. Meanwhile global appetites are shown by the $20 trillion reportedly invested in debt at less than 1% yield.

Some potential issues
Nigeria planning to offer $1bn in Eurobonds and a $500m Diaspora bond, according to Minister of State for Finance Yerima Ngama. It was recently included in JP Morgan and Barclays local bond indices. Yields on the existing $500m Eurobond, due 2021, were down to 4.05% by 3 May, from a peak of 7.30% in October 2011.
Kenya really boosted investor confidence in Africa with its peaceful outcome after elections on 4 March and the Finance Minister Robinson Githae said on 11 March they could be in line to issue up to $1bn by September.
Ghana fuelled by an oil boom, has seen its debt yields on the 10-year bonds down 3.43 percentage points to 4.82% since their issue in October 2007, said Bloomberg.
Zambia successfully raised $750m last year at 5.625% and is thinking to return for another $1bn. Yields were up 20 basis points to 5.66% by 3 May.
Tanzania has asked Citigroup to help it get a credit rating before issuing a maiden Eurobond of at least $500m. Finance Minister William Mgimwa said a total of $2.5bn was bid for a private offering of $600m of Government debt in March. According to this story on Reuters that bond’s pricing and structure at the time had shocked markets and appeared to benefit investors: “The cheaply priced US$600m seven-year private placement was described as a “disaster” by one banker. And certainly the immediate secondary market performance looked terrible. The bonds jumped 2.75 points on their first day of trading.. That works out at a cost to the government of US$4m a year in coupon payments, assuming that the bonds could have priced at the tighter level.”
Angola did a private sale of $1bn in debt in 2012 and will go for $2 billion this year, according to Andrey Kostin Chairman of VTB Bank OJSC, who helped arrange the first issuance, last October.
Mozambique and Uganda may also issue foreign currency bonds of $500m each, according to Moody’s last October.
Gabon’s $1bn of dollar bonds are down 4.78 percentage points to 3.13% since they were issued in December 2007.

Infrastructure needed to celebrate AU’s 50th anniversary

Tom Minney — Sat, 11 May 2013 10:30:25 +0000

Ozwald Boateng

“Unity has no meaning unless it is the ability of the coal miner in Botswana to power a plant in Angola or the farmer in Uganda to export food to those short of food in northern Kenya”. This is the verdict of Ozwald Boateng (ozwaldboateng.co.uk), a powerful force in menswear and fashion for 25 years, writing in the Times newspaper about the 25 May celebration of the 50th anniversary of the African Union.
He says Africa’s wealth will only be a blessing when put to use. Africa may have 60% of the world’s uncultivated arable land”but this will only be a blessing once the land is cultivated and the produce from that land transported to its markets”. He points out how infrastructure, specifically railways, opened North America, the steppes and China.
“Lack of adequate transportation can add as much as 60% of the farm-gate cost of African agricultural products.. the farm-gate price of palm oil in Sierra Leone is double the world market price.
“Trade between African States stands at only 10% of all trade, compared with 60% in Europe.” He blames lack of infrastructure, restrictive customs, administration and technical barriers and lack of trade finance. But infrastructure is key and Africa needs $93 billion a year to invest in it.
He has formed Made in Africa Foundation (www.madeinafricafoundation.co.uk) with entrepreneur Kola Aluko and Atlantic Energy to promote, develop and fund feasibility studies for infrastructure projects. They are working with African Development Bank to implement Priority Action Plans of the Programme for Infrastructure Development in Africa (PIDA), including transport, energy, water and information and communications technology (ICT).
“Once countries and people share infrastructure and assets, it is harder to go to war with each other. They have a mutual desire for the other’s survival as the wellbeing of eon becomes balanced with the others.
“Peace encourages industrialized nations to invest in Africa’s growth rather than mining, the sale of arms or in the aid charade of consultant and quick fixes. Virtuous behaviour creates more virtuous behaviour.” He says Africans have substantial work at every level “to change how we see Africa, in order for it to fulfil its potential”.
According to the website, Boateng says: “It’s a well-known statistic that US$400 million of funding for feasibility studies and master plans across sub-Saharan Africa would develop over US$100 billion of infrastructure projects, which in turn would create a trillion dollars of value across Africa. The first step is often the hardest and we have created this Foundation with Atlantic Energy to make that step easier for Africans.”

Rwanda’s $400m Eurobond will pay for power, planes and conferences

Tom Minney — Fri, 10 May 2013 19:08:05 +0000

The first Eurobond issued by Rwanda, due to mature in May 2023, raised $400 million at 6.875%. According to this article in Bloomberg Businessweek, some of the money will be used to pay for building a 28-megawatt hydropower plant. The fund received some $3.5 billion in orders for the bond, which has a coupon of 6.625%, and Finance Minister Claver Gatete said on 24 April that 250 investors took part, according to a report in New Times.
Speaking at the World Economic Forum in Cape Town this week, Gatete said the hydropower plant will be fully operational by June 2014, with 14-MW already onstream by December. Last month he told reporters the rest of the money will be used to complete the building of Kigali Convention Centre and pay off some of state-owned RwandAir’s debt for its expansion programme.
According to local news reports in April, he said: “The bond, which was oversubscribed, signals that international investors have confidence in Africa beyond the usual commodity growth story. Rwanda’s intentions are to invest in infrastructure as part of building a modern, dynamic, service-based economy that is connected to international markets and that allows for rapid development.”
Bloomberg quotes him this week: “We didn’t just go to the market to look for any amount of money — we went for specific projects,” he said. “We have to be very careful when we go to the market and defining what the money will be used for.” But it could sell more debt if it needs to fund “high-impact” projects in tourism and energy.
“Very good news for the country…#Rwandabond, investors are honest judges on our country’s story and progress…they have said it,” the President wrote on his Twitter account @PaulKagame.
The bond has which has a coupon of 6.625%, and the issue was handled by BNP Paribas and Citigroup as joint lead managers, with legal work by London lawyers White & Case, according to their press release , which adds they advised 6 of the last 7 sub-Saharan African sovereign issues. A Rwandan Government delegation did roadshows in Boston, Frankfurt, Hong Kong, London, Los Angeles, Munich, New York and Singapore. Reuters quoted the fund managers saying it was “priced to perfection” and quoted Mark Bohlund, senior economist, sub-Saharan Africa, at IHS Global Insight: “If you want to have exposure to sub-Saharan Africa but you’re worried about a drop in commodity prices and you want to rebalance your portfolio Rwanda is a good investment.”
The yield on the 6.875 percent dollar bond due in May 2023 was little changed at 6.9 percent by 8 May. it is traded on the Irish Stock Exchange. Fitch Ratings rated long-term foreign and local currency rating at B, five levels below investment grade. Standard & Poor’s also gave B with stable outlook. Rwanda’s economy grew by 8.2% for the last 5 years but the Government targets an average 11.5% annual growth in the Economic Development and Poverty Reduction Strategy II (EDPRS II).
The latest IMF mission commented [link] on 16 April: “The economic outlook for 2013 has weakened somewhat since the 5th review. The growth of the construction and service sectors is expected to slow down in response to tighter economic policies. This will be partly offset by stronger growth in agriculture (food crops), for which the first harvest of the year was good, and an acceleration in foreign-financed investment projects. Growth is expected at 7.5% for the year. Downside risks predominate, stemming from possible cutbacks in aid, delays in project implementation, and a more challenging global environment. Inflation is expected to rise to 7.5% by end-2013.”

New CEO announced for Dar es Salaam Stock Exchange

Tom Minney — Thu, 02 May 2013 03:32:30 +0000

Tanzanian news media yesterday (1 May) released the news that 37-year old Moremi Marwa has been appointed as the new CEO of the Dar es Salaam Stock Exchange (www.dse.co.tz). According to this news report on Tanzania Daily News, Marwa was selected by the DSE governing board in mid-March, after the post had been advertised earlier (see this blog post), and is the first stockbroker to manage the East African securities exchange.
He is scheduled to take up his post in mid-May, He replaces Gabriel Kitua, who resigned early in 2013 and will be the fourth CEO since the DSE began operations in April 1998. At the time of writing the news is not yet confirmed on the DSE website (1 May was holiday).
Mr Marwa was the Director and Chief Executive Officer for stockbroker Tanzania Securities Ltd. According to this bio on the TSL website, he was responsible for executing the licensed brokerage’s corporate strategy and investment policy and for discretionary mandates.
“Before he joined Tanzania Securities Limited in September 2010, Moremi was a Senior Manager in Ernst & Young’s Transaction Advisory Services. He has a significant corporate finance and investment advisory experience and has worked with a number of major clients both in the public and private sector.”
Before E&Y he was with Deloitte & Touche in Corporate Finance Services since 2006 as a business analyst. His accounting career included managing assignments such as corporate finance structuring, capital raising, transactions support, syndicated loans structuring and reviews, valuations and financial modeling, feasibility studies and business plans. His earlier career was with Barclays Bank and Bank of Africa.
Qualifications include being a Certified Public Accountant (CPA), a Masters of Business Administration in Finance (MBA) and a Bachelor of Commerce (B.Com) in Accounting. He also holds the ACI (Financial Markets Association) Treasury Operations Certificate. He is licenced by the Capital Markets & Securities Authority (CMSA) as Authorised Dealers Representative and Authorised Investment Adviser. Moremi is also a Licensed DSE Floor Trader and is a Council Member of the DSE.
Congratulations to Mr Marwa and best wishes to the DSE, well managed in the interim by Mrs Mary Mniwasa.

Zimbabwe Stock Exchange launches great investor relations (IR) drive

Tom Minney — Mon, 29 Apr 2013 08:30:18 +0000

Congratulations to the Zimbabwe Stock Exchange (www.zimbabwe-stock-exchange.com) on its excellent new website, launched last month, including a very useful listed companies’ data terminal. This is good work by the ZSE team and Rob Stangroom’s work at African Investor Relations and related websites. The site opens up great access to a wide range of Zimbabwean listed companies annual reports, together with trading and other useful data.
Congratulating the ZSE, Zimbabwe’s Minister of Finance, the Honourable Tendai Biti commented: “The ZSE has come of age and it is moving in the right direction with this new functional data portal. It creates a platform for international investors to obtain the latest information on investment opportunities in Zimbabwe, and we are in effect, promoting and branding Zimbabwe properly as an attractive investment destination. There is now more transparency than ever before and stakeholders’ information requirements are being met.” This is quoted in the ZSE press release on the new system
According to a post by Rob: “The new Zimbabwe Stock Exchange website / data portal has a number of unique notable features not least of which is the complete availability of all corporate data, corporate actions and company information – all of it disseminated using push technology and social media (Twitter and Facebook). Notable is the Investorpass function supplied by B2i Technologies in the USA, which enables each registrant to have their own secure repository (for 7 years) of all communications received from the Zimbabwe Stock Exchange.
“The new ZSE data portal has some handy online share charting tools for retail investors to compare the share price performance of the top 10 companies by market capitalization and any companies that are in the same sector. This may not seem significant other than the fact that information like this usually has to be paid for in Africa’s other stock exchanges.”
In the ZSE press release, Mrs Eve Gadzikwa, Chairperson of the ZSE, said: “The ZSE recognises the role of the Internet in communications in investor relations and, as part of our capacity building exercise, we are now able to respond to the needs of stakeholders who have been looking for a mechanism to obtain almost real-time information at the click of a button. Even though our organisation is a small institution, we are adopting a different approach in data dissemination which has meant a significant input into data collection, implementing functionality that ensures we achieve our objectives. We have teamed up with www.africanfinancials.com , Africa’s largest portal of online annual reports, to ensure that every annual report is available for viewing and download online immediately it is released. This is not something done in other markets. Compared with other data portal sites in Africa, ours is undoubtedly a notch above the rest.”
“Certainly, from a cost perspective, we can do away with hardcopy communications, which will save listed companies a significant amount of money and increase efficiency. On our side is international online investor relations precedent and best practice, high Internet penetration in Zimbabwe, so the pillars are there and it is a case of us getting online experience and taking it from there,” she said.
CEO of the SEC, Tafadzwa Chinamo, said he is impressed that the ZSE is now in control of its information and in charge of communicating relevant data to its stakeholders. “We can see that the necessary steps have been taken to ensure the ZSE’s online information dissemination is of a high standard and as a regulatory body, we look forward to the continued progress the Exchange will undoubtedly make in disseminating information timeously to all its stakeholders.”
According to Rob: “My involvement in online investor relations in Zimbabwe over the past 5 years has been rewarding and the launch of the ZSE Data Portal the pinnacle of this journey. I look forward to taking our integrated communications services to more listed companies and want to urge investors to consider Zimbabwean listed companies as an investment opportunity. In the ZSE Data Portal stakeholders in Zimbabwe now have a comprehensive tool to make more informed investment decisions.
Martin Matanda, Acting CEO of the ZSE, added: “The exchange is pursuing a bigger picture than just efficient information dissemination. It will be moving to a fully electronic communications’ platform.
View the ZSE data portal on www.zimbabwe-stock-exchange.com.
In January Rob’s team announced that stock exchange information was available on smart phones. The African IR App is a smartphone application that allows African stock-exchange-traded companies to optimize their investor relations (“IR”) content for iPhone, iPad and Android mobile devices. The African IR App is powered by the IRapp™, the leading investor relations app platform engine. He said that 8%-10% of investor relations website traffic came from smartphones.

Zimbabwe Stock Exchange terminates 3 listings

Tom Minney — Mon, 29 Apr 2013 08:20:48 +0000

The Zimbabwe Stock Exchange (www.zimbabwe-stock-exchange.com) has informed investors and the public in a press release that it has terminated the listings of 3 companies with effect from 23 Apr 2013. In terms of Section 1.18 of the ZSE listing rules, they cannot be traded on the ZSE official list again. The companies are:
Barbican Holdings Limited
The Company was suspended in 2004 following the closure of the Company’s banking subsidiary by the Central Bank. Since then, Barbican Holdings has failed to meet its continuing obligations. No response has been received from the principals of Barbican Holdings Limited at the last known address.
TZI Limited
The Company was suspended in 2004 following a material adverse event in a Zambian subsidiary. Since then, TZI Limited has failed to meet its continuing obligations. No response has been received from the principals of TZI Limited at the last known address.
Red Star Holdings Limited
The Company requested for a suspension rather than a delisting at the time of the conclusion of a Scheme of Arrangement within the group. Since then, there has been no report of progress on the purpose of which the suspension was made. Consequently, a decision to terminate has been made.
The order was announced by the Interim Board of the ZSE.

Egyptian Exchange holds workshops with mutual funds to boost liquidity

Tom Minney — Thu, 25 Apr 2013 18:30:02 +0000

The Egyptian Exchange (www.egx.com.eg) is busy with workshops for mutual funds, investment banks and managers of investment institutions, aiming to boost trading volumes through better communications between market participants and listed companies.

Trading floor of Egyptian Exchange – Dec 2012 pic: ACMN, Tom Minney

The workshops gave investor relations (IR) officials of the listed companies a chance to present their work plans and investment options and the fund managers could also discuss latest developments and current market variables.
According to an EGX press release, Dr. Mohammed Omran, EGX Chairman, said the EGX is keen to boost stock market liquidity. Fund managers praised the communication with listed companies and said it adds to the disclosure provided by EGX. It gives a legal framework for officials of listed companies to answer questions from the institutional investors.
This is a high priority in the current Egyptian economy where all market participants need to work hard to keep the Egyptian Exchange strong and active capital market in the short and medium term.

Regulators discuss East African bookbuilding and stockbroker licences

Tom Minney — Thu, 18 Apr 2013 21:35:29 +0000

The regional forum, the East African Securities Regulatory Authorities (EASRA), is seeking to create a harmonized licensing framework for the region for brokers and dealers, and has also approved draft regulations on book-building for adoption by its members. The draft book-building regulations are to be shared with stakeholders in the member States and their views will be brought to the next EASRA meeting.
Book-building is a process of determining the price at which an initial public offering will be offered. The book is filled with the prices that investors indicate they are willing to pay per share, and when the book is closed, the issue price is determined by an underwriter by analyzing these values.
According to news reports, Joseph Katto, chairman EASRA and CEO of Capital Markets Authority – Uganda, said that book-building can be an effective mechanism for price discovery and demand assessment if regulations are clear and enshrine transparency, The draft regulations would ensure a level playing field for various investor categories.
EASRA also approved a proposal to establish a harmonized licensing requirement framework for stock-brokers and dealers. The proposed framework will guide the drafting of harmonized regulations for licensing within the region.
The decisions were taken during the 37th Consultative meeting held in Kampala, Uganda on 5 April.
EASRA members are also seeking ways to facilitate joint inspection programmes and investigations where two or more member states agree. This would boost cross-border surveillance for market participants who operate across the region..
The meeting was chaired by Katto and was attended by Mrs Nasama Massinda (CEO, Capital Markets and Securities Authority Tanzania), Paul Muthaura (CMA-Kenya), Robert Mathu (CEO CMA-Rwanda), Joseph Bahizi (Representative of Central Bank of Burundi), members of the EASRA technical committees and other Committee members.
EASRA was set up in terms of a memorandum of understanding between the CMAs of Kenya and Uganda, and CMSA Tanzania. They adopted a common blue print on the integration of the East African Capital Markets in 1997. CMA Rwanda later joined and Central Bank of Burundi in 2011.

Harsh climate for African private equity calls for experienced local guides

Tom Minney — Wed, 13 Mar 2013 18:37:15 +0000

Deals for private equity are getting harder, particularly for larger deals, and there is a “logjam” of funds hunting for cash, according to this interesting article in the Financial Times. Journalist Katrina Manson quotes pioneering Africa investor Miles Morland: “In Africa there are hundreds of deals but you have to go and look for them. In the west, investment bankers bring you deals . . .[but], in Africa, investment bankers are way down the food chain. You need to go and hang around the bars . . . to find the deals,” Mr Morland says.
Everyone has been talking for the last few years about the overwhelming case for investing in Africa, particularly sub-Saharan Africa. The region is growing fast and growth is starting to move from resources to a domestic consumer class fuelled by a giant and fast-growing population. Africa also lags the rest of the world in private equity, it constitutes 4% of emerging markets private equity asset class, compared to 63% for emerging Asia.
The history of private equity in Africa has been chequered. In the 1990s the business climate was still hard and even good investments got hammered by collapsing local currencies. Then came the “noughties” (2000-10) when there were giant returns on some deals, particularly in telecommunications. The sector moved higher on the global radar in 2005 when Kuwait’s Mobile Telecommunications Co (MTC), later renamed Zain, acquired pan-African telecommunications provider Celtel International for an enterprise value of US$3.4bn. Many private equity investors achieved at least 250% return on their investments, and AIG African Infrastructure Fund, managed by a forerunner to Emerging Capital Partners, said in a press release it received approximately $214m, or 4.3x its $50m investment. But other investments were often not performing.
Morland says: “In the current 2007-17 cycle, making money will be harder. An internal rate of return of over 20% will look good. It is a time when careful investors rather than cowboys will do well . . . The phone game is over.”
Meanwhile all the big talking about Africa’s opportunities area bringing a glut of new private equity investors heading to Africa from Brazil, the Middle East and the US, following the big managers who entered in recent years such as Carlyle and KKR. Fundraisers are going for “big ego” funds, writes Manson, with Brazil’s BTG Pactual and others aiming for $1bn and they will be seeking large deals that the continent’s fragmented market can rarely offer. She quotes Marlon Chigwende, Carlyle’s Africa co-head: “When you start going up to writing equity cheques in excess of $75m, there aren’t so many [deals].” Roger Leeds, founder of the Emerging Markets Private Equity Association (EMPEA), says the smarter money is targeting middle market deals worth less than $50m, which he believes have stronger growth prospects: “The fund managers are happy to take investors’ money but it puts tremendous pressure on them to do bigger deals and they’re going to run out. They’re all complaining they’re finding trouble finding deals and they’re competing with each other and driving up valuations.”
One investor also refers to a “traffic jam” of fund managers seeking capital from investors. Data company Preqin says 57 Africa-focused private equity funds (half in South Africa) are looking for $13.1bn. Over the last 2 years emerging market fundraising increased 72% overall to $40bn but fundraising for sub-Saharan Africa fell 3% to $1.45bn last year – well below its peak of $2.24bn in 2008.
However, some investors who do it properly are scoring. Carlyle’s sub-Saharan Africa fund is expected to close above its $500m target in the 3rd quarter, made its first investment in 2012 by taking part in a $210m equity injection in ETG, a Tanzanian agri-commodities trader. Morland’s Development Partners International raised a $500m fund in 2008 and has invested it in 9 deals. It is raising a new fund of the same size.
Manson concludes: “As the African growth story attracts more and more funds, the going is getting tougher. That is one reason why resourceful and locally based management teams matter so much more today than in the past.”
For the full article including views and news from African experts and funds such as Harith, Actis, Ethos and Aureos, now bought by Abraaj Capital from United Arab Emirates, check here for the full article.

Calvert Foundation says all investors set to include impact investments in portfolios

Tom Minney — Sat, 09 Mar 2013 19:33:01 +0000

A major shift is coming in which all investors, individual and institutional, will commit at least a portion of their investable assets to social impact and investing in harmony with their values. Lisa Hall, President and CEO of Calvert Foundation (www.calvertfoundation.org), recently wrote in a blog post: “In 20 years we will look back and consider these past few years as the turning point in an economic movement”. She says she is seeing “a change in cultural norms and expectations”.
Investing for a return that is both financial and social, in other words impact investing, has gained popularity in the last few years, since about 8 years ago when it was still dubbed “community investing.” This remains a core part of socially responsible or sustainable investing, investing into organizations which help people to improve their lives through affordable housing, jobs, community services such as daycare and healthcare, and more, not into publicly-traded companies.
For example, Calvert Foundation offers impact investments so everyone from individual investors in increments of $20 to large corporations in as much as $20 million can invest in low-income communities and provide capital where there is none. The Community Investment Note (CI Note) pays a return of up to 2% to investors and directs capital to help finance affordable housing, charter schools, health centres, Fair Trade coffee co-ops, and job creation. She says: “These investments in the future of our country and our world are helping to transform the lives of individuals and families.”
The mood is changing in how investors think about risk, return and rewards. Calvert Foundation recently commissioned a study involving 1,065 financial advisors: 72% said they had interest in offering products that provide sustainable investment to their clients, while 38% expressed strong interest in being able to offer those products now. The advisers surveyed indicated that they were willing to recommend impact investments to one-third of their clients, dedicating 10%-20% of their portfolios to this type of investing. Based on these numbers, the study estimates a sustainable investment market of about 2.5% of advisers’ assets under management, or $650 billion. “The change that these dollars can make is both monumental and within the scope of our imagination, our expectations and our ability.”
Calvert works with financial advisors and multiple brokerage firms so investors can include the CI Note in their investment portfolios. Microplace (www.microplace.com), an eBay company started in 2007, helps investors purchase Notes online from as little as $20. Hall says: “We are also developing strategies to bring new investors into the fold. For example, we want to engage the millennial generation through partnerships with colleges and universities, social media outlets and networking events. We are also embarking on efforts to connect diaspora communities and enable individuals to invest in their countries of origin. Other special initiatives that we envision for the future include regional initiatives.”

Business – Starbucks backs jobs
The business community is also getting more interested and large corporations are beginning to understand the power of uniting investment and social conscience. Starbucks Foundation in US has teamed up with the Opportunity Finance Network (OFN) to help create and sustain jobs with a $5m seed investment into Create Jobs for USA programme provides capital grants to select Community Development Financial Institutions (CDFIs), including Calvert Foundation, which provide loans to under-served community businesses. The goal of Create Jobs for USA is to bring people and communities together to create and sustain jobs throughout America.

“Food to my soul”
An investor may see impact investing as just a part of the portfolio until she or he understands the social impact. Marta Santiago, a New Mexico resident and CI Note holder since 2005 said: “Calvert Foundation offered me a great opportunity to give food to my soul when it came to switching from Wall Street to an organization that is entirely devoted to helping the community, especially the needy, in a varied, fruitful, and meaningful manner.”
As US government grants for non-profits gets shut down, they turn to impact investors so they have funds to continue providing critical services. The Nonprofits Assistance Fund (NAF), a Calvert Foundation borrower, stepped in to offer emergency bridge loans, providing credit to cover cash flow delays for groups such as the Northern Lights Community School of Warba, Minnesota, a well-managed and incredibly successful school catering to students who have faced difficulties in traditional public school settings. Since 1980, NAF has provided over $75m in loans to more than 1,700 non-profits.
Calvert Foundation’s partner The Paradigm Project, also accessible to investors through our CI Note, invests in clean-burning stoves that reduce wood consumption and toxic smoke, saving village women in northern Kenya long and often treacherous journeys to collect wood. Although the stove is a solution to just one problem, it is part of restoring dignity to women for whom mercy has been in short supply.
Hall is President and CEO of Calvert Foundation. She has more than doubled the portfolio she managed from $76m to $190m while keeping losses under 1.2% during one of the most economically challenging periods in recent history. Follow Lisa on Twitter @LisaGreenHall