The world may not yet be at peace, but we can’t shake this good feeling. Two months ago, we set off into 2018, looking forward to an auspicious year. That sense of growth and anticipation hasn’t diminished:
  • Sarona Frontier Markets Fund 2 just rounded the 3-year mark since its final close and already its LPs are strongly out of the J-curve, posting increasing gains. We hope to soon issue the first distribution.
  • Our growth pipeline looks increasingly strong, and we’re hiring A-team professionals to keep pace. We’ll likely add NYC to our current Toronto/Amsterdam footprint.
  • Public sector leaders – sovereign, the UN and other multi-laterals – are calling to explore partnerships with our funds.
  • In Q1, we published research on FX risk mitigation for private equity investors in Emerging Markets. (Thanks to USAID for funding the research.)
  • Next quarter, we’ll publish research on demand and supply of trade finance for SMEs in Emerging Markets. (Thanks to Global Affairs Canada for that funding.)

Government of Canada announces $1.5 billion investment in Innovative Development Finance

In its February 27th federal budget, the Gov’t of Canada allocated an additional $1.5 billion for blended finance and sovereign loans. This is excellent news for Sarona and other private intermediaries that invest in Frontier and Emerging Markets.
Private investors are naturally skittish about markets they are unfamiliar with, especially those that have traditionally been thought of as too risky.  But governments have the ability to move markets like never before: by peeling off some of the risk, or boosting the expected return, the public sector is able to drive private capital to countries and sectors that they have previously avoided. Developing countries need more private capital investment, and many G20 governments talk about making that happen. (And then they talk some more, and more …) But Canada’s commitment will actually help get it there. It will also catapult Canada back to a leadership position among public sector players.

By investing alongside private capital, on terms that enhance the risk-adjusted rate of return, Canada will align private capital to achieve the Sustainable Development Goals.

Bravo Canada. You’re back!

What about women?

March 8th marked International Women’s Day – a global celebration of women’s achievement. We’ve come a long way… According to the World Bank, in Sarona’s target markets, women represent 37% of the workforce and, increasingly, outnumber men in higher education. This growing talent pool presents unique opportunities for business and development. Yet women continue to be held back by wage inequality and social pressures. The World Economic Forum, in its 2017 Global Gender Gap Report, calculates that gender parity in the workplace is still over 200 years away. That is unacceptable, so we’re doing something about it.
Last year, we piloted a program with MEDA. With USAID support, they offered our portfolio companies a 3-step Gender Equality Mainstreaming Program. (That’s NGOs lingo; we have no idea what it means, but it’s a cool program):
  1. Assessment: An expert in ‘women in business’ interviewed each of the participating business leaders for several hours to assess the company’s understanding of gender issues and gender strategies.
  2. Deep dive: These experts then visited each company for several days to undertake a deeper assessment, resulting in a series of gender strategies that the business could implement.
  3. Implementation: Each company that wished to take the next step then received assistance (both personnel and cash) to implement the agreed gender strategies. One example is a women-focused HR policy that ensures staff is paid according to merit rather than gender.

The point is this: We can talk all year long, but unless we create change, change won’t happen. We ourselves are a cracked vessel. (Leonard Cohen would say that’s how the light gets in.) But we are committed to doing our best to shorten that 200-year horizon to gender parity.

Our team is growing and our systems are improving  

We are pleased to announce that Victoria Harvie will join the Sarona team this month as our Corporate Accountant, based in our Canadian office. And, after an extended search, we’ve chosen Burgiss as our database and fund/portfolio monitoring platform. Implementation is underway.

Sarona named to the 2018 ImpactAssets Global 50  

Sarona is very pleased to be named to the 2018 ImpactAssets Global 50: that’s seven years in row. We’ve been named to the list every year since its inception. According to ImpactAssets, the list is designed to “identify experienced impact investment firms… these 50 firms have been selected to demonstrate a wide range of impact investing activities across geographies, sectors and asset classes.”

We have so much more to share, but we’ll let you get on with your day. Please feel welcome to join us for our annual Sarona Investor Day on May 14th on the margins of EMPEA/IFC Global Private Equity Conference in Washington: GPs, LPs, great speakers and a reception to cap it off. Let us know if you’d like an invitation.