The Development Impact of Acacia Fund

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The Development Impact of Acacia Fund

• Africa Venture Capital Association, Mombasa, Kenya

Noah BeckwithPartner, Aureos Advisers Limited
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Development Impact an evolving perspective
CDC Funds Group ? Aureos Capital

• Aureos Central America Fund
• Aureos Southern Africa Fund
• Aureos East Africa Fund
• Aureos West Africa Fund

Aureos Funds 2001
CDC Funds 1989-2000
Development Impact Profitability Precondition
Private equity ? Development
Holistic NDPs
International Development Community
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Developmental v. Commercial Objectives

• Aureos and DevelopmentThree Tenets
• Developmental and commercial objectives are
  mutually reinforcing.
• Developmental criteria are intrinsic to
  investment process.
• Development objectives are pursued within a
  commercial framework.

Developmentalism v. Commercialism
Commercial Viability
Private Sector Development
SME Sustainability
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The Development Impact of the Acacia Fund

• Three levels of development impact
• Microeconomic
• Access to capital, increased sophistication,
  technology and know-how, sectoral development and
  integration, economic linkages, export
  development.

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Economic Linkages
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The Development Impact of the Acacia Fund

• Three levels of development impact
• Microeconomic
• Access to capital, increased sophistication,
  technology and know-how, sectoral development and
  integration, economic linkages, export
  development.
• Macroeconomic/market
• Sales, consumption, fiscal contributions, export
  generation, investment mobilisation, multipliers,
  externalities, demonstration effects.

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The Acacia FundAggregated Indicators
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The Acacia FundContribution to Growth
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The Acacia FundRegional Expansion of Investees
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The Development Impact of the Acacia Fund

• Three levels of development impact
• Microeconomic
• Access to capital, increased sophistication,
  technology and know-how, sectoral development and
  integration, economic linkages, export
  development.
• Macroeconomic/market
• Sales, consumption, fiscal contributions, export
  generation, investment mobilisation, multipliers,
  externalities, demonstration effects.
• Socio-economic
• Poverty alleviation, sustainability.

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Socio-economic impactsA broader definition of
poverty

• What is poverty?
• More than starvation, malnutrition and premature
  mortality.
• Pronounced deprivation in well-being (World
  Bank Group).
• A broader definition
• Opportunity promoting opportunity for
  employment, enabling the poor to generate wealth
  and to accumulate assets.
• Empowerment reducing vulnerability to exogenous
  shocks which hit the poor hardest.
• Security equitable access to market
  opportunities and opportunities for the
  under-skilled and unskilled.

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Growth, Wealth Creation and Poverty Alleviation
Aureos Equity Investments in SMEs
Business Development - growth and
profitability -professionalisation - formalisation
Kiosks/micro-enterprises
Small enterprises
Medium enterprises
Socio-economic Impacts - asset accumulation -
opportunity, security, empowerment - inclusion
and enfranchisement
Poor/ Marginalised Groups
Middle Upper Income Groups
Low-Income Groups
Economic Impacts - private-sector development -
forward/backward linkages - investment generation
Informal Sector
Semi-Formal Sector
Formal Sector
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