ABN Amro Investment Solutions has collaborated with impact investment platform Symbiotics to build a ‘feeder’ fund that invests in emerging and frontier microfinance credits, while also expanding the related Sustainable Development Goals (SDG) impact themes.
The ABN Amro Symbiotics Emerging Markets Impact Debt is a feeder fund, which invests in shares of the ‘master’ fund, the Symbiotics Sicav II – ABN Amro Impact Fund, which in turn invests mainly in debt instruments in emerging and frontier economies.
Asset managers use the ‘master-feeder’ structure to consolidate various portfolios into one entity and create benefits from economies of scale.
The fund invests according to the following criteria:
1. Financial inclusion, typically targeted at;
i) microfinance institutions;
ii) local commercial banks serving lower and middle income households and micro, small & medium enterprises (MSMEs); and
iii) fintechs, aimed at lower and middle income households and MSMEs.
2. Small business finance through;
i) financial institutions specialised in small businesses;
ii) securitisation vehicles; and
iii) other investment vehicles focusing on small business finance.
3. Project and enterprise development through, primarily, direct financing of company projects.
The investment process is managed by Symbiotics’ team:
– About 50 research analysts identified 300 financial institutions to invest in;
– About 25 transaction experts are responsible for the origination & brokerage and structuring of more than $5bn (€4.61bn) in loans;
– There are circa 15 portfolio managers; and
– An independent risk management division monitors every step of the investment process.
Symbiotics is an impact investment platform for emerging and frontier markets and has an invested portfolio of $2.4bn, as of December 2019.
This fund is the first in a range of impact funds ABN Amro Investment Solutions aims to launch this and next year, the firm said.