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General Presentation

Actions and strategy for the social economy and social enterprises

The way forward

The legacy

• External contribution:

- Council Conclusions on the Social Economy (December 2015),EP resolutions, EESC opinions, CoR opinions;

- GECES report and recommendations (October 2016);

• Commission's contribution and commitment:

- Social Business Initiative (2011) follow-up;

- "Start up and Scale-up" Initiative (October 2016);

- Political and institutional context: EFSI/White Paper on the future of Europe/European Pillar of Social Rights as windows of opportunity;

Series of actions coordinated by the launch of an Internal Task Force

between different services (January 2017).

Presentation of the actions

• Implementation of actions scheduled for 2017-2018.

• Five pillars to be developed:

1. Access to funding;

2. Access to markets;

3. Improving framework conditions;

4. Social innovation, technologies and new business models;

5. International dimension.

Pillar 1: Access to finance

1. Reinforcing EasI guarantee and establishing a debt finance window ("EasI funded instruments")

2. Implementing blended instruments under EFSI Equity:

• Investments in or alongside financial intermediaries;

• Investments alongside BA or investments in BA funds;

• Payment-by-results scheme (pilot).

3. Working on the revision of the EuSEF Regulation (2013).

Pillar 1: Access to finance

4. Stimulating support for Social Enterprise Financing Markets under EaSI such as:

• Capacity building measures (EaSI Capacity building)

• Projects grants to develop markets;

• Operating grants for EU-level networks;

• Grants to reduce transaction costs of financial intermediaries for small investments.

Pillar 2: Access to markets

1. Implementing the revised rules on qualitative public procurement: • Awareness-raising events & capacity-building measures to stimulate

socially responsible procurement for public procurement officers;

• Updating the guide " Buying Social" (2011)

• Discussing better insertion of social clauses in Commission's procurement.

2. Reinforcing the cooperation between traditional enterprises and social economy enterprises:

• Launch of a study in 2017 to select best practices;

• Preparation of a high-level conference on the topic mid-2018.

Pillar 2: Access to markets

3. Identifying entry points for social enterprise/social innovation in Corporate Social Responsibility policy and related actions.

4. Stimulating cross-border activities for social economy and social enterprises.

Pillar 3: Improving framework conditions

1. Preparing guidelines to assist Member States in developing regulatory frameworks for the social economy and social enterprises (if they wish to);

2. Possibly updating the Guide on SGEI;

3. Updating the mapping of social enterprise ecosystems in Europe;

4. Producing four in-depth country reviews with the OECD;

5. Disseminating the EC/OECD compendium of social enterprises policies and initiatives to showcase successful national initiatives;


6. Developing in co-operation with the OECD online policy

assessment tools for inclusive and social entrepreneurship policies for local and regional and national authorities;

7. Boosting the establishment of social economy and social enterprise satellite accounts in national statistical accounts;

8. Promoting the creation of social economy clusters in different Member States.


9. Implementing the Pilot Project "Transfer of businesses under form of cooperatives";

10. Implementing the Pilot Project "Reduction of young unemployment and the setting up of cooperatives".

Pillar 4: Social innovation, technologies and new business models

1. Reflecting on the use and impact of new technologies by social economy actors and particularly social enterprises: • preparing a workshop to be organised in Brussels in cooperation with

EESC - Q2 2017;

• launching a call for tender to map and diffuse best practices in Europe.

2. Implementing the Pilot Project 'Sharing Economy Start-up initiative – Financing the future of European Entrepreneurship;

3. Building the momentum for social innovation and supporting concrete projects through the European Social Innovation Competition.

Pillar 4: Social innovation, technologies and new business models

4. Launching and managing the Social Innovation Challenge Platform which will help to find solutions for important social challenges;

• 1 Million to run a platform and operate as a matchmaker;

• +2.5 Million of re-granting for projects

5. Increasing visibility for concrete projects on social innovation, social economy & enterprises, social impact investment under Horizon 2020; • LEIT: CAPS – Collective Awareness Platforms for Sustainability and

Social Innovation;

• Innovation in SMEs;

• Societal Challenges 6 – Inclusive societies.

6. Reinforcing and mainstreaming the experimentation of Digital Social Innovation models under Horizon 2020.

Pillar 5: International dimension

1. Promoting social economy and social enterprises in

neighbourhood/enlargement policies and programmes;

• Launching a programme for enhanced economic development in the Southern Neighbourhood (eg: Southern Mediterranean);

• Developing bilateral and regional support (eg: Moldova, Armenia, Western Balkans).

2. Promoting social economy and social enterprises in

development policies and SDGs objectives;

• Conducting a feasibility study under the Partnership Instrument with the FPI;

• Following up specific projects in Eastern Africa (Ethiopia / Kenya)

• Promoting inclusive business models through the Inclusive Business Action Network (IBAN);

• Following up on Framework Partnership Agreements (International Cooperative Alliance/ COM.

Pillar 5: International dimension

3. Economic Diplomacy: promoting the role of social

economy and social enterprises in international fora (UNTFSSE, ILGSSE, G20, G7, ILO …);

• Meetings with international organisations and fora;

• Possibly organising a conference on "Financing the Social Economy" with ILGSSE (2018).

4. Promoting the relations with International Finance Organisations and Donor Community:

• Participating in the Global Social Impact Investment Steering group;

• Capitalizing on the possibilities offered by the new European External Investment Plan (EIP) – Exploring possibilities for a Social Impact Investment Window.

5. Cross-cutting actions:

• Preparing guidance documents & communication tools for external delegations and to relevant DGs and Services.

Further information

• https://ec.europa.eu/growth/sectors/social-economy

• @SocEntEU

https://twitter.com/SocEntEU













ICT4DEVELOPMENT AND SOCIAL ENTREPRENEURSHIP

Close the Gap and Private Sector collaboration ESELA Congres – 28th of April 2017

Mobile devices can provide literacy to the world’s poorest regions

Cellphones most likely to become most used e-reader!

OVERVIEW

1. Close the Gap and WorldLoop, 2 social enterprises, once a university start-up

2. Who am I

3. Evolution of Close the Gap : from NPO to a Social Enterprise (in a VZW/ASBL entity)

4. Governance – Challenges and Shared Governance

5. Evolution of Social Business

6. Q&A

Close the Gap’s journey https://www.youtube.com/watch?v=mQgSlz3Y9C4

Close the Gap and WorldLoop, 2 social enterprises,

once a university start-up

• One fun fact: I’m a part-timer since 11 years combining at job at Deloitte and got the chance to build 2 social enterprises

• Top tip for well-being: “Practice what you preach”

• Big wish for the future charities/NPO’s: Make the shift to Impact Investment and show the world that Sustainability (SDG’s) and Business needs should be completely mainstreamed.

Founder & CEO Close the Gap Int. / WorldLoop

Vanden Eynde Olivier

<Please insert a personal photograph of yourself here so your colleagues can get to know you; for example, doing your favorite

hobby, or a photo with your family>

Who am I - BIO

• 1997-2003: Free University of Brussels – Solvay Management School

• 2002-onwards: Start-up Close the Gap vzw/asbl

• 2006-onwards: Deloitte

• 2008-onwards: Start-up PC Solidarity

• 2009-onwards: start-up WorldLoop vzw/asbl

• 2017-onwards : Close the Gap Impact-First Investment Fund

Evolution of Close the Gap : from NPO to a Social Enterprise (in a VZW/ASBL entity)

Close the Gap: Bridging the Digital Divide

• Founded in 2003 as a social enterprise in a vzw/asbl legal entity

• Serving mainly African partners (22 countries)

• More than 750.000 computers collected

• Around 158.000 computers deployed in developing countries

• 1,900,000 unique IT users reached weekly

WorldLoop: Changing the E-waste Cycle

• Founded in 2009 by Close the Gap

• Serving Sub-Saharan Africa, Latin America

• Operational in 8 countries across 2 continents

• 2,993+ tons of e-waste collected and processed

• 300+ tons of hazardous waste spared from landfills

WHAT WE DO – CLOSE THE GAP

Service Partners

Distribution Maintenance Trainings End-of-life collection & recycling

WHAT WE DO – WORLDLOOP

WHAT WE DO – Close the Gap & WorldLoop

INTERNATIONAL REACH

Uganda

Belgium

Senegal

Ghana

Sierra Leone Togo

Cameroon

D.R.Congo

Ethiopia

Kenya Rwanda

Tanzania

Zambia

South Africa

Nepal

Thailand

Philippines

Burundi

Malawi

Mozambique

Burkina faso

Colombia Nigeria

Pakistan Cuba

Brazil

Peru

Iraq Afganistan

Indonesia

Laos

Vietnam

Benin

Mali Niger

Madagascar

Guinea

Ecuador

Zimbabwe

Close the Gap Projects E-waste Recycling Coverage

Bo2W Hazardous Material Flows

But.... in 2013 only 63% of households in rural areas have a mobile phone,

compared to 80% in urban areas

Driving social impact at every stage of the development of social businesses Close the Gap 2.0

Facilitate pilot with a minimum viable product

Validate/ iterate/ pivot

VALIDATION CO-CREATION GROWTH

From challenge identification and mobilization to concept development

Accelerate the social impact Prove it works Co-create solutions

Challenge analysis

Co-concept

Pilot Start-up

Scale-up Replicate

We are issue-driven

We can mobilize key stakeholders

We facilitate pilot projects

We facilitate starting -up entrepreneurs

We invest in scaling-up high impact organizations

We facilitate replicability of high impact organizations

Establish and strengthen

Co-creating a system for digital development in Kenya

Close The Gap 2.0

Corporates

Labs

Government bodies

HNWI / Foundations / Funds

Subsidies & sponsoring

Incubators

Accelerate the social impact Prove it works Co-create solutions

Accelerators

Trainers/coaches

Schools & universities

Social Impact

IRR

for i

nves

tors

(inte

rnal

Rat

e of

Ret

urn)

HIg

h M

ediu

m

Low

High Medium Low

Social Impact Funds Landscape

17 30/01/17 18:55:58

2-3%

10%

CTG2.0 Fund is a ‘social impact first’ investment fund investing in social enterprises that apply an entrepreneurial business model to achieve societal goals

Donor Involve Fund

YE! Fund

Investisseurs et Partenaires is a French impact investment firm promoting a new generation of responsible entrepreneurs in Africa.

A Senegal based Fund issued by I&P specially designed to answer the needs of Senegalese SMEs.

A Netherland based impact investment firm investing in entrepreneurs of basic goods/services for the majority world in sub-Saharan Africa

A Netherland active investors’ community making the commitment to ‘put your money where meaning is’ to grow the momentum of impact. Launched Donor Involve Fund to catalyse early stage companies.

A Belgian impact investment fund with the mission to generate high social impact and a fair financial return

YE! Fund A NL fund addressing the funding gap for young entrepreneurs to boost job creation

A new Belgian Fund incubated by the KBF to unlock the potential of entrepreneurial farming in the South.

A US donor Fund helping build financially sustainable organizations that deliver affordable goods and services that improve the lives of the poor.

6-7%

Existing digital initiatives solving challenges in development

18 30/01/17 18:55:58

Ghana

Coding schools

South Africa

Kenya

Tanzania

Uganda

Start-up & scale-up

Barefoot Law - Access to law advices facilitated by Technology

On-line chapter of books lending to BOP

Crowdfunding Platform – crowdfund for school fees

First chain of affordable pre-primary and primary private English Medium schools

Saving account for BOP population

Smart Community enabling ICT based education content

Digital classroom for poor infrastructure schools

Schools for BOP - IT enabled

App enabling entire campus experience in your pocket.

Mobile application that reconnects students to their courses, everywhere.

Access to clean energy to remote areas

Software development and entrepreneurship Schools & incubator

Mobile devices as a catalyst for

sustainable & technological developments

OVERVIEW


2. Who am I


4. Private sector for Development :Governance – Challenges and Shared Governance


6. Q&A

Trends in… SUSTAINABLE PARTNERSHIPS WITH PRIVATE SECTOR

PARTER COMPANIES 2016

ABN-AMRO

COCA-COLA

COMPANY

Gemeentebestuur

Overpelt

Nederlandse

Spoorwegen TéVé Company

NATIONALE BANK VAN

BELGIE VLIR-UOS BEDNET

ACCG

COCA-COLA

ENTERPRISE GlaxoSmithKline NEDTRAIN TIMEOS TELENET ZIGGO BELFIUS

ACERTA COFELY GDF SUEZ HEINEKEN PARTENA TOYOTA TEVA EUROPE ZIGT BNP PARIBAS FORTIS

AEGON

Council of the

European Union

HILL + KNOWLTON

STRATEGIES POLITIEZONE MIRA UCB Pharma

MEDISCH CENTRUM

ALKMAAR FSMA BRIGHTFISH

AKZO NOBEL CWGC Hogeschool Gent POSTNL UMICORE MOBISTAR SAS INSTITUTE BV ENEXIS

AMNESTY

INTERNATIONAL

CZ

VERZEKERINGEN HOME MARKET PRORAIL UNIVE

LIEDEKERKE

SD WORX ESSENT

ANL-PLASTICS DAF IMEC

PROVINCIEBESTUUR

WEST-VLAANDEREN

UNIVERSITAIR

ZIEKENHUIS

ANTWERPEN

EUROPEAN

SCHOOLNET SPIE EUROCENTER

APKO

DE

NEDERLANDSCHE

BANK INTERTRUST RABOBANK UPC CABLECOM EXACT STORK

EUROPEAN

INVESTMENT BANK

ATTERO DEJOND NV

KAREL DE GROTE

HOGESCHOOL

RABOBANK

INTERNATIONAL VISION BY DELOITTE FARYS

King Baudouin

Foundation

LIBERTY GLOBAL

AZ GROENINGE DELAMOTTE KBC REAL DOLMEN VIVAQUA BTC CTB LENOVO

CIRB - CIBG

AZC UTRECHT EBAY

KLM ROYAL DUTCH

AIRLINES VLAAMS PARLEMENT CARGILL LEYLAND TRUCKS

VLAAMSE LIGA TEGEN

KANKER

BANK DEGROOF EFQM KLUWER

RODE KRUIS

VLAANDEREN

GOVERNANCE : Close the Gap ‘group’

Close the Gap Foundation (SON)

WorldLoop vzw

PC Solidarity

Close the Gap Int. vzw

What’s next ????

Merger with Con-Colleague

Partnership with a African TELCO

Company

OVERVIEW


2. Who am I


4. Governance – Challenges and Shared Governance


6. Q&A

Terminology

25

• Business model of the future: solve the problems facing society without causing new problems

• Determine long term challenges where you can make a difference (look at SDG)

• Develop product portfolio around it

• You are certain to have a market and it guarantees your licence to operate

• Healthy food and Unilever, electrification and emission control Umicore, green chemistry,…

How impact investing plays into this evolution

Don’t do it alone • Reaching real impact is :

• Complex

• Hard to measure

• Demands local knowledge

Impact investing development effects

• Jobs

• Economic growth

• Taxes > government > public goods (“enabling environment”)

• GHG emissions ↘

• Capacity building

• Local & regional socio-economic development

28

Input Project Output Outcome Impact

The challenges… : • Weaknesses in the “enabling environment”

- legal, political, administrative, institutional, infrastructural, economic, commercial, financial, etc.

• Lack of qualified / experienced people • Lack of managerial competence • Economic sectors not or hardly developed • Low purchasing power, middle classes only emerging

But many opportunities :

• 9 of the 10 strongest growing economies worldwide over the past

decade are developing countries

• A young generation educated abroad taking charge

• Endless market opportunities

29

Investing in developing countries: challenges & opportunities

Olivier Vanden Eynde [email protected]

+32 478 284 084

www.close-the-gap.org www.worldloop.org

THANK YOU!

http://www.close-the-gap.org/

Donate your company’s

IT devices

and help Africa grow

http://donate.close-the-gap.org

http://donate.close-the-gap.org/





Entrepreneurs for Entrepreneurs promotes

sustainable economic initiatives in developing

countries

• Entrepreneurs for Entrepreneurs facilitates socio-economic initiatives in low- and middle-income countries.

• We do this by matching businesses and entrepreneurs in Belgium directly or indirectly with such initiatives.

• We encourage cooperation in the form of financing, material support and providing expertise.

Mission Entrepreneurs for Entrepreneurs

• 2001: NFP established as ‘CFP’ (Corporate Funding Programme), members are NGO’s and Enterprises.

• 2012: Name change: ‘Ondernemers voor Ondernemers (Entrepreneurs for Entrepreneurs)

History Entrepreneurs for Entrepreneurs

• De Standaard 7 maart 2001:

De privatisering van ontwikkelingssamenwerking gaat nog een stap verder. Het is te

vergelijken met de goede werken uit de 19de eeuw, de "ngo's van die tijd, die zeker niet bijdroegen tot de sociale ontvoogding." De ngo's van vandaag verkopen hun eerstgeboorterecht voor een bord linzesoep, vindt Vandepitte die zes jaar geleden in deze krant over diezelfde ngo's schreef dat ze "de missionarissen van een nieuwe kolonisatie dreigen te worden.”


• De Standaard 26 april 2002:

De oprichting van het Corporate Funding Program of de Bedrijfsgiftenbank vormde

van in het begin de inzet van verhitte debatten binnen de ngo-wereld. Tegenstanders vonden dat het niet kon dat een ngo geld van bedrijven ontving.


• 2001: collaboration with and fundraising for NGO’s

• 2001: SDG ‘avant la lettre’

• 2008: new composition Board of Directors

• 2013: introduction B2B initiative

• 2014: First Trophy Entrepreneurs for Entrepreneurs

• 2016: Crowdfunding and partnering

• 2017: formalise (revive) Thinktank

Learning curve and new insights

Entrepreneurs for Entrepreneurs supports the Sustainable Development Goals of the United Nations

2001: SDG ‘avant la lettre’

Good governance ?

8

2008: new compostion Board of Directors

• Board represents all stakeholders

– Companies

– Ngo’s

– Fundraisers

– Experts

– Communicators

All stakeholders Gender equality ?

We are an incubator of new ideas and initiatives

We do not depend from subsidies

2008: new compostion Board of Directors

How do joint projects between not-for-profits and for profit impact governance and mutual learning ?

2013: introductie B2B initiatief 2014; Trophy 2016: crowdfunding 2017: revive Thinktank

Investing in the South ... with a heart for the South

Governance Issues & Social Impact Investing NESsT’s experience in CEE and Latin America

Roxana Damaschin-Tecu

Bruxelles, April 28 2017

About NESsT

1

3 | Governance in Social Enterprise

ABOUT NESsT

• CREATE dignified jobs and income for people facing the greatest barriers to work in emerging market countries

• INVEST money, business coaching and social capital into early-stage entrepreneurs

• TRANSFORM communities so that all people are self-sufficient and empowered to determine their own futures


How NESsT Creates Impact


Value Proposition

Methodology

2


Methodology

By committing to these enterprises for five to seven years, we’re able to support them through the tough transition of moving from start-up to fully scaling businesses.

Direct Investments

Business Advice

Social Capital

Measurement

Enterprise Impact


Portfolio Selection Criteria

Social Impact Enterprise Performance Management Team

Acceptance into the NESsT portfolio is a six-month process that assesses competencies with four key areas.

Potential to provide employment opportunities

at scale

Business operating with some sales

Track record with vision for growth and scale

Entrepreneur can effectively leverage NESsT's support

NESsT Value Add


Tailored Investments

Patient investments that meet the needs of entrepreneurs for validating their employment models.

Early Stage Growth Stage

Grants

Business planning and market research

Testing employment model

Recoverable Grants

Product and talent development

Validating employment partnerships

Low-Interest Loans

Working capital and long-term debt

Preparing for employment at scale

Governance

3


• Well governed SEs generate better financial and social outcomes

• Assess governance in due diligence (composition, decision making processes, roles and responsibilities, legal framework)

• Identify gaps and needs

• When no board exists, educate the SE management team on its need. Quite often in developing countries.

• Connect with existing board members and assess the relationship with the executive team

• Why should a NESsT representative join the boards of its investees?

• Adds values

• Prevents mission drift, ensure proper balance social / financial goals

• Provides strategic input and has decision making power over key issues (growth strategy, management teams)

• Keeps focus

• Why the need to do so?

• Did not do it in the past, learnt the hard way.

• Changing role: from advisers to investors.

• Could not prevent bad financial / business decisions

• Could not change management team when needed


• Areas of contribution:

• Assessing & managing risks,

• Putting in place control systems,

• Involving their network in the interest of the SE,

• Bringing in specific expertise

• Who should represent NESsT?

• Depends on the gaps to be filled in – individual assessment

• Should match skills and time availability

• Get involved in individual capacity

• Challenges:

• Models where equity investors are involved (voting rights, valuing the financial and non financial support provided to the SE, approach towards profit distribution)

• Family business models

• Models with at risk communities on board

• Models where a large non profit owns the social enterprise


RESULTS & IMPACT

Social Challenge: In an era of globalization, local traditional products in Romania risk becoming obsolete as they are replaced by mass-produced, pre-packaged imports. This shift in consumer culture threatens environmental sustainability and does little to promote fair and ethical trade between consumers and local producers.

Social Enterprise: Mai Bine’s social enterprise CUIB sells fair-trade and eco-friendly products from local producers, including people with disabilities who have limited access to markets. The store also organizes community events to raise awareness on sustainability issues.

NESsT Investment: • Supported Mai Bine with business planning as well as the development

and implementation of a communications strategy. • Helped identify potential suppliers among social enterprises and

provided support for HR planning, coaching and leadership consolidation, and measuring and monitoring impact.

• Leveraged US$12,300 in additional support and analyzed potential growth strategies.

MAI BINE IASI, ROMANIA | JOINED NESsT PORTFOLIO: 2013

4,000+ products sold

10 small

producers receiving

sustainable income

US$69,554 NESsT

investment to date


RESULTS & IMPACT

Social Challenge: Approximately 8-10% of the people in Hungary have intellectual or physical disabilities, and only 14% of them have jobs. The lack of meaningful work opportunities results in isolation, low income, lack of access to basic services and overall low quality of life.

Social Enterprise: Kék Madár Alapítvány runs a restaurant called Ízlelő that provides training and employment for people with intellectual and physical disabilities, and at the same time offers a nutritious dining alternative for the community. The restaurant recently expanded its seating capacity and is planning to replicate its model in three to five other locations in the next five years.

NESsT Investment: • Invested US$168,852 to scale the business, including purchasing a

new office facility, expanding and relaunching the restaurant • Supported in developing key systems for managing performance,

finances and client satisfaction • Provided pro bono legal counsel for the restaurant expansion and for

developing a replication model to allow for future growth in new towns

KÉK MADÁR ALAPÍTVÁNY SZEKSZÁRD, HUNGARY | JOINED NESsT PORTFOLIO: 2008

45 disabled

people have been trained for catering professions

27 life-changing, dignified jobs for disabled

people

80 family

members whose lives have been positively impacted


RESULTS & IMPACT

Social Challenge: In the Andean Highlands, there are few opportunities for employment and reliable income. Most members of these small, remote villages are poor farmers.

Social Enterprise: Inka Moss is the only Peruvian company that collects and processes, in a sustainable way, sphagnum moss – a natural product that is highly demanded by international orchid growers. The company trains these small farmers to collect the moss and become suppliers in its value chain. The company provides them with fair wages, training, technology, materials and tools, as well as infrastructure development in their communities.

NESsT Investment: • Supported the development and validation of technologies being used

by suppliers. • Helped refine the business model and financial strategy. • Provided support on scaling strategies and assisted in the design of an

expansion plan, to start in 2017. • Advised on outreach to co-investors, including opportunity analysis,

pitch deck development and negotiation strategy

INKA MOSS JUNÍN, PERU | JOINED NESsT PORTFOLIO: 2015

8,300 people

reached to date

40 remote Andean

communities reached by 2020

60,000 people whose

livelihoods will improve

by 2020

INCLUSIE INVEST

Dr. Wim Bijnens – april 2017

congres ESELA - "Teaming up in the middle: how do business and nonprofits jointly create social impact".

Social entrepreneur

De Cronos Groep - The CoFoundry Inclusie Invest – vzw Stijn – St. Oda [email protected] be.linkedin.com/in/wimbijnens +32 495 59 02 35

You can not live in a waiting list

• More than 5,000 people are on a waiting list for custom

housing.

• These individuals only have an income between 770 and 1,600 euros per month.

• Clear separation between living and care in new forms DIO,

PVF.

• The resources of the government are limited.

You can not live in a waiting list

Sufficient adjusted & affordable living forms so everyone can get

the necessary support and/or care.

The system is dulled

From social acidification … … to involvement

• Savings funds (> 265BJEUR) are without knowing knowing invested in speculative projects.

• We expect the government to solve everything.

• Citizens remain on the side.

• Apply savings for local projects with social values (Geert Noels, Econopolis - 30 Oct '12).

• Customized housing for people with disabilities creates employment and reduces waiting lists.

INCLUDE INVEST Seeks Investors

in society

Collaboration with care organizations

• INCLUDE INVEST will not realize residential projects without a partner (healthcare provider).

• A group of parents can be partner if they have an agreement with a care provider.

INCLUSIE INVEST Seeking investors in society

A private social housing company

For people with disabilities *

* A cooperative company with a social purpose (CVBA-so)

recognized by the NRC and VAPH. http://www.fsma.be/nl/supervision/

fm/oa/ug/prospectusems.aspx

Mobilizing capital

• Mobilizing capital to realize customized living arrangements.

• Rent these arrangements at affordable prices to exclude poverty.

• In collaboration with local service organizations to enable demand-driven care.

• As close as possible to the social network of the user.

Mobilizing capital

• People invest/purchase shares of Inclusie Invest.

• Its an ethical investing, helping to solve a social problem.

• Small return in the form of a dividend.

• Each shareholder has the opportunity to specify a project preference.

Safe investment with respect!

It is an investment in real estate. It's not a gift, no donation! A share retains its nominal value of 2,000 euros. (For Crowdfunding E shares this is 500 euros). The limited return (realized by the rental income) is tax deductible at 190 euros/year.

People help to solve a social problem!

Investment in ONTROEREND GOED …

… for companies and natural persons *

B & C shares 2.000 euro E shares : Crowdfunding 500 euro

A D B C E

* Organizations that provide support or assistance (care) And the government: Participation Society Flanders PMV.

The road – 2011/2017

• March 1, 2011: the foundation • August 2011: FSMA's first prospectus • Sept 2012: 1st project TOOTB Schilde - 12 studios • Nov 2013: 2nd project LSA -Zutendaal - 17 studios • Dec 2013: 3rd project UBUNTU - Avelgem - 8 studios • Jan 2014: decision Flanders Goverment 6% VAT • March 2014: recognition of VAPH • June 15 - 15th Sept.: Bolero Crowdfunding • Oct 2015: 4th project de Klokke St.Niklaas – 12 studios • Dec 2016: 5th project OCMW Zemst - 6 studios • 2017: • 6th project Zonnenlied Tollenbeek - 8 studios • 7th project Mosaic Oostakker - 12 studios • 8th project CockerillHof Hoboken - 9 studios • 9th project The roundabout - tbt

The road – 2011/2017

YEAR CAPITAL PROFIT DIVIDEND STUDIOS

2011 1 710 000€ -3 588€

2012 3 256 000€ -91€ 12

2013 3 574 000€ 19 049€ 37

2014 6 590 000€ 16 741€ 0,5%

2015 7 351 500€ 110 120€ 1% 49

2016 8 601 500€ 82 282€ 1% 55

2017 10 000 000€ 84

The road – 2011/2017

Where do we stand today (April 2017): 340 investors 8.625.500 euros capital + EUR 1.180.000 promised (PMV)

* Liquidity buffer (LRM) 5.000.000 euro.

A 28%

B 12%

C 27%

D 32%

E 1%

CHARES AMOUNT EURO

A 1185 2 370 000€

B 506 1 012 000€

C 1171 2 342 000€

D 1410 2 820 000€

E 163 81 500€

TOTAL 8 625 500€

Investeer mee in ontroerend goed

www.inclusieinvest.be

• You can not live in a waiting list! • The resources of the government are limited! • Helps solve a social problem!

A private social housing company

For people with disabilities

1

Social Enterprises

ESELA Conference Brussels, 28th April 2017

2

Vlaams Welzijnsverbond = Flemish Network (umbrella-organisation) for service providers in social welfare App. 750 members who are actve in : - Child Care - (Special) Youth Care & Family Support - People with Disabilities

3

What we do ?

We are a recognised employers organisation We are the voice of our members in policy

making (proactive, vision) or policy influencing (reactive)

We support our members : information,

formation, assisting with operational problems, networking, …

We combine our strenghts: we work for and

with our members

4

Our values Solidarity to meet special needs of vulnerable groups

Respect for the rights of each person

Connection with everyone who wants to contribute to a

better society

Engagement to express ourself critically when the quality of

life of people is at risk

5

Challenges in WELFARE SECTOR NEW and EXISTING NEEDS - (super-) Diversity SOCIETY - Radicalisation - Individualisation (inclusion?) - Aging - Efficiency and Effectiveness - Small social network - Commercialisation - Instability of families - Free market - Children with psycho-social needs - Labour market - Waiting lists - … - Poverty - Technological developments - Inclusive care - …

6

(social- ) ENTREPRENEUR

Passionate Hard worker

Focused courage

Taking risks Efficient Effective

Goals Targets Strategy

Bussinessplan Leadership

Opportunities Talents Action

8

Charter of Social Entrepreneurship

A Social Entrepreneur wants to create social added value for individuals and society

- Maximazing the right on well-being for everyone

- To create new opportunities

- Solidarity in society

- We make a contribution to economic growth and employment

9


A Social Entrepreneur is driven by values

- Alert for new needs and new evolutions

- Prepared to give a good answer

- Quality of care and quality of life is essential

10


A social entrepreneur is open and transparant - Trust and transparency to all stakeholders

- Sharing responsability

- Participative model

11


A social entrepreneur re-invests the profit in

the social purpose

12

Legal form for Social Entrepreneurship ?

No doubts about the mission of the organisation : are we a profit or a non-profit organisation ? 1. Articles of association: clear indication on social

purpose 2. Practice what you preach: impact assessment and

accountability on the realisation of the social goals

Section x: Alissa Pelatan

Development Director, ESELA April 28th 2017

Agenda

1. European Social Enterprises

2. ESUS Company in France

3. SIS Company in Luxembourg

4. Comparison of ESS and SIS Legal Statuses

5. Concluding remarks

Reflection on social enterprise evolutions in France and Luxembourg

1. Mapping Study on Social Enterprise

Social Business Initiative (SBI):

■ SBI launched in 2011

■ Mapping study commissioned in

April 2013

■ Mapping study published in

November 2014

■ Legal summary published by

ESELA in October 2015

1. European social enterprise

ESUS Company in France

“Entreprise de l’économie sociale et solidaire” &

“Entreprise Solidaire d’Utilité Sociale”


Entreprise Solidaire d’Utilité Sociale (ESUS) Law n. 2014-856 of 31 July 2014

Key features

SSE Companies

• « Traditional » SSE Companies: associations, foundations, mutual companies, cooperatives); &

• Commercial companies with the following statutory provisions: • Primary social aim (social utility), • Democratic governance, and • Limits on distribution of profits

Social Utility and Solidarity Enterprise

• Primary social aim (social utility), • Limitation on compensation, • Activity has a significant impact

on financial returns or expenses,

• Shares cannot be traded on regulated market,

• Renewable every 2 or 5 years


Entreprise Solidaire d’Utilité Sociale (ESUS) Law n. 2014-856 of 31 July 2014

Main advantages

SSE Companies

• Image / Communication • Visibility / Funding

Social Utility and Solidarity Enterprise

• 90/10 Funds • Tax advantages on

investment (very limited) • Subsidized employment

contracts (in some cases)

SIS Company in Luxembourg


Société d’Impact Sociétal (SIS) Law n. 255 of 12 December 2016

Key features

Commercial Companies

• SA, SARL, SC only • All traditional ESS structures are

not SIS companies (only some commercial companies and cooperatives)

SIS Company

• Primary social ailm (social utility),

• Autonomous management, • Limitation on profit and asset

distribution, • Annual impact report + KPIs

to measure performance of social impact,

• Annual audit


Société d’Impact Sociétal (SIS) Law n. 255 of 12 December 2016

Main advantages

Commercial Companies

SIS Company

SIS companies with 100% of impact shares: • Collectivity income tax exemption, • Commercial commune tax exemption, • Fortune tax exemption, • Income tax deduction for donations

(cash) granted to SIS (same as FRUP and ASBL),

• Public funding

Any SIS company: - Visibility, - Grants, - Public tenders (marché publique)

ESUS and SIS Comparison

4. Comparison Chart - Caracteristics

Main Criteria European SE ESS-ESUS (Fr) SIS (Lux) Economic Activity ✔ ✔ ✔

Primary Social Aim ✔ ✔ ✔ Asset and/or Profit

Limitation ✔ ✔ ✔

Inclusive Governance ✔ ✔ Organisational

Autonomy ✔ ✔

Compensation Limit

✔

✔

Impact Reporting and Measurement

✔

Main Differences ESS-ESUS Enterprise (Fr) SIS (Lux)

Primary Social Aim

- Focus on social activities (vulnerable persons, inequality, education, social bonds, territorial cohesion…)

- Broader definition (gender equity, development of cultural or creative activities…)

Asset and Profit Limitation

- Profit Limitation (optional asset limitation)

- Profit and Asset Limitation - 2 categories of shares (performance

shares and at least 50% impact shares)

Governance - Democratic governance (stakeholder participation)

- Autonomous management (no stakeholder requirement)

Compensation Limit

- Limit on both managers and employees - Higher cap (7 x av. of 5 highest paid workers

& 10 x minimum wage of highest paid worker)

- No limitation on only employees - Lower cap (6 x minimum wage)

Impact Reporting and Measurement

- None - 2 KPIs (min) to verify the achievement of social aim

Control and Verification

- Verification every 2 years or 5 years (ESUS)

- Shareholder debate on progress (ESS Best Practices Guide – June 2018)

- Verification of ESS status by CRESS (rare)

- No sanctions (other than removal of label)

- SIS controlled each year by an external auditor

- Annual report on the extra-financial impact

- Prior approval from Minister before modifying business purpose, KPIs, or share capital (impact or performance)

- Company is dissolved and liquidated for failure to respect conditions

Legal forms - Available to all legal forms in the “social and solidarity economy”

- Available for cooperative and commercial companies only

Concluding remarks

• Luxembourg: SIS is a legal status available to only commercial companies and could be ideal for impact investing funds but may be too burdensome (costs for control and verification procedures)

• France: ESS-ESUS is a legal status available to all legal forms

and could attract some impact investing funds and social entrepreneurs (primary social aim, stakeholder participation…) but still needs fine tuning (limited tax advantages)

SIS and ESUS are two concrete examples of how law can

change the paradigm of social enterprise and is a reflection of the specific local needs and culture of each country

5. Concluding remarks

Please visit www.esela.eu and contact us at [email protected] to stay informed

http://www.esela.eu/

mailto:[email protected]

Presentatie Curia

What is a Social Impact Bond (“SIB”)?

• A partnership between a public authority, private investors and a social service provider following which the private investors provide upfront funding to the project of the social service provider. The financial returns for the private investors are dependent on the outcomes of the social program and paid by the public authority.

Presentatie Curia

Structure of SIB

Public Authority Investors

Social Service Provider

Evaluator**

Outcomes contract

Financial returns dependent on

outcomes

** Conducts an objective and fact-based evaluation of outcome (≠ services provided) of social program

Outcomes Measurements

Payments based on outcomes

Funding

Presentatie Curia

Advantages of SIB

• Permits to create preventive and innovative social projects

• Financial risk is transferred to private investors

• Costs for government authority are correlated with cost savings

• Upfront funding of social service provider

• Accent on (measurable) outcome – incentive to be efficient

Social Impact Bond

[email protected]

Social Impact Bond

1 New Public Private Partnerships

2 Risk Outsourcing – Pay for succes Innovative and risk holding projects

3 Service providers secured from pressure

Investors Service Providers

Governments

Outcomes-based commissioning unlocks an expanded focus

Entrepreneurial Solutions

Tried-and-tested Solutions

Prevention Intervention Crisis Management

Outcome type

Ou

tco

me

ap

pro

ach

Existing focus

Expanded focus

Social Impact Bond

Independent. evaluator

First SIB project in Flanders: Target group: N.E.E.T.’s Antwerp Integrate the potential of people into the labour marker

Service Provider

Investors

NEET’s

N.E.E.T.’s = Not in Education, Employment, or Training

The project target group: NEET’s in Antwerp

Number of NEET’s in Antwerp: more than 30% higher than in the rest of Flanders

Officially on the labour market, still no job seeking guidance started

27,9 %

Drop outs

12,3 %

Job seeking guidance followed, but without result

27,3 %

Officially not on the labour market,

never in a trajectory

32,5 % Not officially looking for work

Officially looking for work

43,6% 56,4%

1/3 completely off the radar

The project target group: NEET’s in Antwerp

Some youth are no NEET, but still…

Problematic truants

1781

Students without study points

940

Non-eligible students adult education

1163

Job seekers in guidance

1781

5576 youth 12,1%

9,5%

7123 youth

The project target group: NEET’s

Self- reliant

Soc ec needy

Would – be NEET’s

Youth unemployment

NEET’s Highly educated

Middle educated

Low educated

Provision of services towards N.E.E.T.’s

The project target group: NEET’s

• 700 training and matches of NEETs/5 years

• outflow to long-term solutions & aftercare for rest Group

• agile young people with correct work attitude & future perspective

• reduction of the cost of living wages/benefits

• social savings on edge problems NEET youth

• Filling vacancies by NEET youth

Objectives

Social investors

Service Provider

Independent evaluator

Government Partner

Contractual

agreements

Scanning limits:

The legal regulations of SIB participants. (statutes, engagements, responsibilities,…)

Labour market stakeholders support for the SIB-concept (who will, can, may eye which role ?)

Policy Areas, Flemisch and federal

Assignment of concerned government agencies and departments (Which missions and tasks goes to who ?)

Effectiveness of the applied approach

Critical success factors of the applied approach (does it work because it is innovative or is the succes due to the context or other factors ?)

Possible redistribution of the labour market stakeholders

SIB in context of the Flemisch Labour Market

Independent. evaluator


Service Provider

Investors

NEET’s

Investors

Service Provider



…

Service Provider



… …

Investors

Facilitator

Service Provider



…

NEET’s

Investors

Investors

Facilitator

Service Provider



NEET’s

Extern consultancy SIB –expertise

Public Tender

Policy areas, Flemisch and Federal

Budget


Lessons learned / Lessons to learn :

Service Provider Provision of Services

Approach VDAB: Evolved from a search for a Service Provider to a search for a Provision of Services

SIB



SIB is not merely a financial model It creates bridges between the investment world and the social service providers sector



SIB is a new financing mechanism, complementary to the traditional forms of financing



When and how involve/integrate intermediary and independent evaluator

The right procurement form to choose a Service Provider or preferably a Provisoin of Services

Investors

Facilitator

Service Provider



NEET’s

Extern consultancy SIB –expertise

Public Tender

Policy areas, Flemisch and Federal

Budget

Social Impact Bond

[email protected]

[email protected]

DIB’s, SIB’s: fancy acronyms or revolutionary funding methods?

Outline notes and definition

What is a SIB ? The UK Centre for Social Impact Bonds defines a Social Impact Bond (SIB) as an arrangement with the following four features, each with additional explanation from Cass Business School, Abi Rotheroe and others:

1. A contract between a commissioner and a legally separate entity ‘the delivery agency’ for the delivery of services in tended to deliver….

2. A specific social outcome or outcomes, by which we mean a change, which, if achieved by the delivery agency, will activate a payment or payments from the commissioner;

3. At least one investor that is a legally separate entity from the delivery agency and the commissioner; and

4. Some (or all) of the financial risk of non-delivery of outcomes sits with the investor which can be through a direct link to the contract for service delivery, or it can be indirect, in terms of a profit share or other conventional return from the enterprise.

That gives a very wide scope for the sort of contracts and the sorts of funding. In essence, though it is about affording a business delivering social outcomes the capital it needs to make it happen. In service areas we can see (either already live or emerging):

Youth – homelessness; employment and training; recidivism; services around care systems Children – edge of care; adoption; support and therapeutic services Families Adult homelessness Health – diabetes (1 and 2) and others Adult recidivism Independence and other services for those with learning disabilities …….and many more

In contracting structure we can see:

Delivery contract held through a special purpose vehicle – in some ways the “classic” model Delivery contract taken directly by a charity, social enterprise, or other established Delivery contracts (multiple) taken by networks of delivery organisations working under a central

coordinator and a common contractual structure and with central funding/investor pool In terminology we have a number of variations based largely on the mode or focus of their delivery side:

Social Impact Bonds – designed to deliver a social change Development Impact Bonds – designed to achieve change in terms of development outreach, largely to

traditional Third World countries, and focusing both of economic and social, and in some cases environmental change

Collective Impact Bonds – emerging to reflect the term “collective impact” and describing the mode of getting multiple deliverers of services to work together to deliver a complex social outcome

Jim Clifford OBE [email protected]

mailto:[email protected]

Just checking: what’s a social impact bond ?

• A contract for delivering services

• Deliberately creating social outcomes – changes in the lives – of individuals or communities

• Generally paid-for on the basis of

– success in delivering those outcomes, or

– delivering other value

• With its own embedded way of financing its work up-front

• At least one investor that is separate from the commissioner and the deliverer

0

1. The “classic” commissioner-led SIB structure (“Intermediated”)

From the “Social Investment Symposium Report 2013”

1

2. A Provider contract or Networked SIB structure (“Networked” or “Managed”)

2

Investors

SIB Fund

Service provider 1 Service Provider 2 Etc…

LA Commissioner 1 LA Commissioner 2 Etc…

Management/ Admin Co.

The Sector

Investment paid down Capital + returns paid back

Limited recourse working capital finance paid to service providers

Outcomes payments remitted back to Fund by LAs (collected by Service

Providers)

Contract for service provision between Service

Provider and LA commissioner

Fund administration, financial accounting and outcomes data

monitoring

Share of profits endows the service or similar

activities after the SIB ends

2

3. The Direct delivery SIB

3

Investors

Service Provider

Commissioner

Investment Return on investment

Services (and outcomes)

Payment for services and

outcomes

1

ANNUAL CONFERENCE - BRUSSELS APRIL 28TH 2017 TEAMING UP IN THE MIDDLE: HOW DO BUSINESS AND NON-PROFITS JOINTLY CREATE SOCIAL IMPACT?

WORKSHOP: TEAMING UP WITH SOCIAL FUNDS

VISION

• SI² Fund bridges a public funding gap for social enterprises that focus on addressing societal issues with a business approach

• SI² Fund (° 2012) was the first fund of its kind in Belgium

Pioneering in Europe in social impact investing

SI² IN A NUTSHELL: VISION & MISSION

2 www.si2fund.com

MISSION

• SI² mission is to generate significant social impact and a fair financial return through direct minority investments with focus on Benelux

3

SI² invests in the capital of commercially viable start-ups with high social impact potential

• Focus on Benelux (min 50%) and

neighbouring countries incl. UK

• Min €250k – 1,500k per investee

• Early-stage non seed and growth

• Minority participations.

• Active board representation

• Co-investments

• Investment period 7-8 years

Investment scope

• Social mission first

• Measurable social impact KPIs

• Sector agnostic (excl. real estate)

• Viable business plan

• Strong Management

• Investment structure

• Exit potential

Screening criteria

www.si2fund.com

SI² IN A NUTSHELL: STRATEGY

4

Funding investment-ready social enterprises to accelerate their scale-up and impact: early-stage and growth stage

www.si2fund.com

Pre-seed phase

Seed phase Start-up phase

Growth Expansion

SI² IN A NUTSHELL: STAGE

• Legal structure: Belgian cvba / scrl

• Fund size : Up to €25 M. (€16.7 M. committed to date) still open (2 private foundations & 19 HNWI’s, no public funding)

• Investments size : €250k – 1,500k (over investment lifetime) per investee.

• Target portfolio : 15-25 investees, 2/3 new investee per year

• SROI: Societal value/financial Investment: min 2.0 SROI, for each

€ invested, more than 2 € returned to society over 5 years

• Financial IRR: 3% at fund level, 8-10% at investee level over 8 years

• Exit horizon : 8 years

• Fund horizon: 10+2+2 years

5

Initial capital and investors base.

www.si2fund.com

SI² IN A NUTSHELL: KEY TERMS

6

Selective screening of initial investments

www.si2fund.com

SI² IN A NUTSHELL: PORTFOLIO

7

Lessons learned till now

www.si2fund.com

SI² FUND: CHALLENGES

Many issues & challenges… • Portfolio companies: Financial Management Market

• Team: Right people in a small team in 3 countries

• Shareholders: Alignment on social/financial balance

Governance issues

… but still hopefull & positive !

8

Embedded in an ecosystem that supports social enterpreneurs

SI² FUND & OKSIGEN ECOSYSTEM

A social innovation ecosystem: answers to different needs of social enterprises

http://www.google.be/url?url=http://www.dvo.be/bedrijf/13092-sociale-innovatiefabriek-v-z-w/&rct=j&frm=1&q=&esrc=s&sa=U&ei=G3o2VPWQGMHsO5mygJAF&ved=0CBUQ9QEwAA&sig2=342Sbw-Kz2aPdwjJruMPeQ&usg=AFQjCNFqlvY7OtwMuJKoY3iQdS9JQKn1Fg

9

An example: smart cities, mobility & last mile delivery

SI² FUND & OKSIGEN ECOSYSTEM

10

Co-creation between social enterprises and inclusive business

www.si2fund.com

THE WHOLE PICTURE: CO-CREATION

11

What could government & legislation change / do ?

www.si2fund.com

THE SI² FUND EXPERIMENT

What really could help social enterprises… • A guarantee fund (since SE’s take private risks & the benefit is for the common good)

• Promotion, outreach, publicity for “social enterprises” as a valid way between non-

profit & commercial business-as-usual (ex. Sociale Innovatiefabriek)

• Structural funding for ecosystems, incubators, accelerators, Belgium could be an experimental garden for social innovation (SIB, BSC,…)

• Some simple additions in bylaws or formalities before launching a (social) enterprise

Where I don’t believe in:

• A seperate “label” with a committee of experts deciding “yes” or “no”

12

ANNUAL CONFERENCE - BRUSSELS APRIL 28TH 2017 TEAMING UP IN THE MIDDLE: HOW DO BUSINESS AND NON-PROFITS JOINTLY CREATE SOCIAL IMPACT?

WORKSHOP: TEAMING UP WITH SOCIAL FUNDS

Thank you ! [email protected]

Committed Beyond Investment

Regulatory constraints for impact investors in Belgium

Loïc De Cannière CEO

Incofin IM

Esela Conference, Brussels, April, 28th, 2017

Committed Beyond Investment 2

Who we are

• A leading international impact investor, delivering solid market returns for our LPs

• >15 years of experience in financial services and agriculture

• Expertise in private equity and private debt investments

• Capital Plus approach, including providing Technical Assistance (operating support)

for strategic projects to boost investee development

• AIFM licence

• Shareholders: Incofin IM staff (80%), CVSO (10%) and GIMV (10%)

Incofin is a leading international impact investor

Investments

Headquarters

Regional offices

Investment team of 27 investment professionals (10 private equity, 13 fixed income, 4 agro)

Operating support of 3 experts

Total staff of 53 of over 20 nationalities

160+ investees

47 countries

300+ transactions

$850m assets

What we believe in

• Invest in dynamically managed enterprises in emerging countries

• Create value for investors and achieve inclusive progress

• Driven by entrepreneurial and human interest for commercial business solutions, which promote inclusion

• Provide opportunities for vulnerable or less privileged people to improve their lives

• Share values and goals with investors and portfolio companies

• Commit to the highest professional standards and to ethical values and goals

Incofin is promoting inclusive progress

Purpose

Open, never hiding for each other

Hands on,

solution driven

Always ready to give first, not to ask first

Explore new opportunities

1.

Entrepreneurial

2.

Generous

3.

Transparent

4.

Practical

Values

3


Our investors are repeat customers

Some of our investors*

DFI

Private Institutions (Non-Financial)

HNWIs + > 1,500 Private Individuals

*non-exhaustive

Private Institutions (Financial)


Incofin IM funds Duration Currency Funding (USD)

Equity/ debt

Jurisdiction/ Legal Form

Min ticket size Investor Type

2015 – 2025 USD 140m 45/52 The Netherlands Coöperatief U.A.

USD 1m Institutionals HNWI

2010-2020 EUR

110m 46/54 Luxembourg SA, SICAV-SIF

EUR 125.000 Institutionals HNWI

2007-2017 (in liquidation)

USD 38m 12/88 Luxembourg SA, SICAV-SIF


2004-2016 (in liquidation)

EUR 39m 19/81 Belgium NV


2012, evergreen

USD 32m 0/100 Luxembourg SA, SICAV-SIF


2001, evergreen

EUR 100m 26/74 Belgium CVBA with Social Purpose (CVSO)

EUR 130 Retail Investors

2015 evergreen

EUR 450m 0/100 Germany AIF Sondervermögen

EUR 100 Retail & Institutionals

Main funds we manage/advise (B/Lux/D/NL) Incofin IM’s funds invest in private equity and private debt

Status of Incofin IM’s license

6

1. Incofin IM funds invest (mainly) in non-listed securities

Incofin IM = Belgian AIFM (with European Passport) managing:

• 1 regulated Luxembourg SICAV-SIF (AuM > 100 m EUR - exceeding AIFMD threshold for leveraged funds)

• 1 regulated Dutch structure (Coöperatief U.A.)

2. Incofin IM advises:

• 2 self-governed Luxembourg structures (AuM < 100 M EUR)

• 1 Belgian retail fund Incofin CVBA-SO (self-governed AIF)

• 1 German retail fund “AIF Sondervermögen” (managed by German AIFM)

3. Why AIFM License

Incofin IM obtained AIFM license from FSMA in 2014 after a 2-year procedure costing more than 100 k EUR. Why AIFM License:

• One of our Luxembourg funds exceeded AIFMD threshold of 100 m EUR for leveraged funds

• AIFM is quality label

4. Challenges

• Trans-border AIFM Dependent from Belgian regulator and regulator of fund jurisdiction (CSSF, AFM, BaFin). 2-year delay in transposition of AIFMD in Belgium (2014 vs. 2012) caused major challenge for Incofin IM.

• Expensive license for small company (application + maintenance)

Belgium delayed transposition AIFMD with 2 years..

7

… creating major issue for transborder fund m’gers

Impact funds mainly domiciled in Luxembourg

8

Belgium AIFs not attractive neither to institutional nor to retail investors

• Belgian AIF structures are less flexible than Luxembourg counterparts (eg Belgian Privak) • Belgian distribution rules are very complex and restrictive (private placement vs. public offer) • No retail distribution allowed unless through CVBA-SO (not fit for distribution through bank platforms - no ISIN – MIFID restrictions) or

through “Openbare Privak” (including many restrictions) • Insignificant Belgian AIF fund industry and lack of adequate supporting services Belgian taxation less competitive (but not the key issue)

60% of all Microfinance funds registred in Luxembourg

Investors favour Luxembourg for the following reasons: • Very clear and flexible regulation – permament innovation/improvement of structures

• Efficient and responsive regulator (CSSF) • Excellent fund services

What’s wrong with Belgian AIF structures for impact investors?

Attractive AIF fund structures in the Netherlands for distribution of impact funds to Germany and

retail and institutional investors.

9

Most European impact FMs offer adapted fund structures

1. Incofin

Belgian cvso

2. Responsability Global MF Fund

Lux Sicav Part II

4. Blue Orchard MF Fund

Lux Sicav Part II

5. Triodos MF Fund

Lux Sicav Part II

3. ASN Novib Microcredit fund

Nederlands open fonds voor gemene rekening

6. Invest in Visions

German “Sonstiges AIF Vermögen”

Direct

Platforms and Banks

DISTRUBUTION SHARES

Belgian AIFs not fit for distribution

Simple suggestion for regulatory change: Belgium

10

Relax restrictions on distribution rules for Impact AIFs • EU AIFM Directive (2011/61/EU of 8 June 2011) was transposed into Belgian AIFM Law of 19 April 2014

• AIFs can be distributed to:

• Professional Investors (harmonized European definition) • Non-professional investors (criteria and restrictions for private placement defined at EU Member State

level)

• Art. 5 of Belgian AIFM Law defines criteria allowing marketing towards non-professional investors (through private placement regime), i.e.:

• Offer made to less than 150 persons; • Minimum treshold of 100,000 EUR/250,000 EUR

Proposal # 1: Lower minimum threshold in Belgian AIF Law for marketing towards non-professional investors to 10,000 EUR only for investments in Impact Funds (in line with ELTIF threshold) in order to improve access for retail investors to Impact AIFs

Suggestions for regulatory change: Europe

11

Harmonize rules for HNWIs investing in institutional AIFs

• When offering our AIFs to HNWIs in other EU member states, we need to check the locally prevailing rules on private placement to “non-professional investors”:

• Legal opinion required for every country • Rules different in every country leads to Kafka-like situations

• Absence of an EU – wide cross-border placement regime is an obstacle to capital raising with HNWI in

Impact Investment Sector

Proposal # 2: Harmonize rules at EU level for private placement to non-professional investors in AIFs in Impact Investment Sector

Committed Beyond Investment

Disclaimer

This document has been prepared for informational purposes only, and the information herein may be condensed or incomplete. Incofin IM specifically does not make any warranties or representations as to the accuracy or completeness of these materials. Incofin IM is under no obligation to update these materials.

This information does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. Under no circumstances shall Incofin IM or any funds or facilities advised, sub-advised or managed by it be liable for any loss, damage, liability or expense incurred or suffered which is claimed to have resulted from use of these materials, including without limitation any direct, indirect, special or consequential damages, even if Incofin IM has been advised of the possibility of such damages.

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