peter johnson
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Microfinance Retail Funds
Peter JohnsonPartner and Capital Markets Manager
TBLI AsiaSeptember 15, 2011
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Microfinance Funds Channel Capital to Microfinance Institutions
Investors allocate capital to MIVs which invest in MFIs in developing countries
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• Microfinance Fund Mangers create investment vehicles to channel investor funds
• Vehicles provide MFIs access to capital markets and funding to grow
• MFIs provide financial services to entrepreneurs in developing countries
• Investors target social impact and financial return
Microfinance Institutions
Investment Vehiclesdebt, equity, hybrids &
othersMicrocredit Borrowers
Investors
MF Funds
MFIs – Microfinance InstitutionsMIVs – Microfinance Investment Vehicles
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
MIVs provide debt, equity & guarantee financing to MFIs
Majority of MIV financing is through debt investments
Microfinance Investment Vehicles: Overview
Estimated 102 MIVs globally with total assets under management of $6.8 billion1
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86%
34%
25%
10%
21%2
0%
25%
50%
75%
100%
2007 2008 2009 2010 2011
MIV Total Assets Growth1
1 Source: Symbiotics MIV Survey, 2011 (as of 2011)2 Survey Respondents forecast for 2011. Historical data refers to previous
CGAP MIV surveys.
82%
10%
0.1%8%
Financial Instruments (% of Microfinance Portfolio)1
Direct Microfinance Portfolio - Debt
Direct Microfinance Portfolio - Equity
Direct Microfinance Portfolio - Guarantees
Indirect Direct Microfinance Portfolio
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Private Institutional Investors represent the largest share of investors across fund types, followed by High Net Worth Individuals (HNWI) and Retail Investors and then
Public Sector Funders
Source: Symbiotics MIV Survey, 2011
Microfinance Investment Vehicles: Investors
Retail Investors and HNWI provide nearly one third of MIV funding
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26% 31%
9% 13%
45% 40%
60%61%
30% 30% 31%27%
0%
20%
40%
60%
80%
100%
All MIVs Fixed Income Funds
Mixed Funds Equity Funds
Sources of MIV Funding
Retail Investors & High Net Worth Individuals
Private Institutional Investors
Public Sector Funders
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Microfinance Funds for Retail Investors and HNWI: Examples
Retail Investors seek double bottom line of financial return and social impact
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Organization Investment Minimum
Target Annual Return1 Investor Location
MicroPlace $20 1-3%2 US
Kiva $25 0% (principal repaymentonly)
Global
Oikocredit$250 ≤2% US, Canada,
Europe, UK, Mexico, Asia
Calvert Foundation Community Investment Notes
$1,000 1-5 year notes: 0.5% - 2.0%
US
responsAbility Global Microfinance Fund
$1,000 Excess of money market level in the fundcurrency
Europe
BlueOrchard DexiaMicrofinance Fund
$10,000 6M Libor + 1-2% US and Europe
1 As of September 10, 20112 Depends on investment. Fixed returns range from 0.5%-3.5% with an average return of 1-3% stated.
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
The DWM Microfinance Fund – J: Overview
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Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Daiwa Securities and DWM launched the first commercial microfinance fund in Japan
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Net Asset Value1
USD 248 million
Launch Date March 2011
StatusOnly Open to
Japanese Investors
Use of ProceedsDFI Bonds &
Loans to MFIs
Dividend Payment
Semi-annually
The $242 million Daiwa
Microfinance Fund invested
$236 million in its underlying
investment vehicle, The DWM
Microfinance Fund-J (DWMF-J)
Distributed by Daiwa Securities
Co. Ltd.
DWMF-J makes only local
currency debt investments
The DWM Microfinance Fund – J: Overview
1 As of 6/30/11
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Daiwa Microfinance Fund Historical NAV (¥)
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NAV Line
High on 4/11/11 10834.00
Average 10102.29
Low on 09/09/11 9499.00
10800
10600
10400
10200
10000
9800
9600
9400
9499
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
DWMF-J Portfolio: Overview
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Azerbaijani Manat2.8%
Brazilian Real 20.6%
Costa Rican Colon 1.3%
Honduran Lempira 0.2%
Hungarian Forint 2.3%
Indonesian Rupiah 3.9%
Indian Rupee 6.5%
Jordanian Dinar 0.9%
Cambodian Riel 0.9%
Mongolian Tugrik 3.1%
Mexican Peso 11.8%
Peruvian Nuevo Sol 3.2%
Polish Zloty 0.1%
Russian Ruble 19.4%
Turkish Lira 4.1%
South African Rand 19.2%
Portfolio of local currencies from MFI loans and bonds issued by development finance institutions
DWMF-J Exposure by Currency1
1 As of August 31, 2011
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
About DWM: Investment Manager Track Record
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DWM Asset Management, LLC Fund Management
Relationships with 400+ Microfinance Institutions (“MFIs”) in over 80 countries
Address full sweep of MFIs’ capital needs
Financial innovation – leader in creative microfinance transactions
Experienced team with long careers in emerging markets investment banking &
fund management
$850+ million Microfinance Assets under Management1
Institutional-scale origination capacity & credit skills
Emerging Markets fund manager since 1994
1 As of 6/30/11
$65
$333
$484
$600 $640
$850
$0
$200
$400
$600
$800
$1,000
2006 2007 2008 2009 2010 2011
DWM's AUM (Millions)
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
About DWM: DWM Aims to Deliver Social Impact
DWM MIVs have channeled over $850 million to approximately 140 MFIs in developing countries, impacting
over 3 million micro-entrepreneurs and family members
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$850+ million DWM MIVs1
Investments in approximately 140
MFIs
3 million+ entrepreneurs and
family members reached1
1 Assuming an average microloan size of $1000 and assuming an average family size of four in the countries in which DWM invests
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Risks and Disclosures
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Opinion
Any statements of opinion constitute only current opinions of DWM Asset Management, LLC, which are subject to change and which DWM Asset Management, LLC does not undertake to update.
Portfolio Holdings
Portfolio data is “as of” the date indicated and should not be relied upon as a complete or current listing of the holdings of the portfolio. The holdings are subject to change without notice, and may not represent current or future portfolio composition.
Some information in this report is based on unaudited information and is subject to change.
Short Performance HistoryPerformance history of less than two years may not provide an adequate basis from which to determine the performance of a fund. Accordingly, such a short performance history should not be relied upon.
Unaudited Information Subject to ChangeSome information in this report is based on unaudited information and is subject to change.
Third Party Information
Some information contained herein has been obtained from DWM Finance, LLC and other third party sources and has not been independently verified by DWM Asset Management, LLC. DWM Asset Management, LLC makes no representations as to the accuracy or the completeness of any of the information herein.
Strategy/Process Risk Disclaimer
Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Many factors affect fund performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment return and principal value of your investment will fluctuate, so that when you investment is sold, the amount you receive could be less than what you originally invested. Past performance is not a guide to or indicative of future results. Future returns are not guaranteed and a loss of principal may occur. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Risks and Disclosures
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THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY AN INTEREST IN THE INVESTMENTS DESCRIBED HEREIN. NO SUCH OFFER OR SOLICITATION WILL BE MADE PRIOR TO THE DELIVERY OF AN OFFERING MEMORANDUM AND OTHER MATERIALS RELATING TO THE MATTERS MENTIONED HEREIN.
THIS DOCUMENT IS A SUMMARY, DOES NOT PUPORT TO BE COMPLETE, IS FOR DISCUSSION PURPOSES ONLY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED DISCUSSION CONTAINED IN THE ACTUAL OFFERING MATERIALS.
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THIS DOCUMENT IS BEING PROVIDED TO YOU ON A CONFIDENTIAL BASIS, ACCORDINGLY, THIS DOCUMENT MAY NOT BE REPRODUCED IN WHOLE OR IN PART, AND MAY NOT BE DELIVERED TO ANY PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF DWM. COPYRIGHT 2011.
Securities transactions through DWM Finance LLC member FINRA/SIPCPast performance is not indicative of future results. Please see end of presentation for Important Risks and Disclosures
Contact Information
DWM Asset Management LLC
750 Washington Boulevard, Stamford, Connecticut 06901, USA
www.dwmarkets.com
Tel: +1.203.655.5453 Fax: +1.203.656.9528
FOR MORE INFORMATION CONTACT:
Peter Johnson Hiroshi Amemiya Partner & Manager, Capital Markets Representative, [email protected] [email protected]