sarona frontier markets fund
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Sarona Frontier Markets Fund 1 LP
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Bringing meaning to your investments
Take Advantage of Frontier Market Upside
Invest in impact investing through a fund of SME funds focusing on SME equity in developing countries in clean tech, microfinance, agro-processing, health, tourism and telecom value chains
Entrust a manager with a 56-year track record in SMEs in Frontier Markets and a history of exceeding performance
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A. The Frontier Market Upside
B. Our solution
C. Our track record
IntroducingSarona Frontier Markets Fund 1 LP
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Frontier Market UpsideGDP Growth Trend
Frontier Market Upside Stock Capitalization
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Frontier Market UpsideSmall & Medium Enterprises – Sector Trend
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Frontier Market UpsideThe Environmental Premium
-20%
0%
20%
40%
60%
80%
100%
120%
140%
Tota
l Re
turn
Difference
Above Average Innovest Carbon Beta Rating (All sectors)
Below Average Innovest Carbon Beta Rating (All sectors)
Innovest’s Carbon Beta Model (Global stocks):Returns for 57 months Top 50% vs. Bottom 50% All Sectors
Annualized Alpha: 378 bps
Source: With permission of Matthew Kiernan (2009) of Risk Metrics
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• Impact Investing: • A new industry has developed• Achieving profit plus impact on
social and environmental level
• The Economist predicts:• this will be a new asset class of• $500bn in 5-10 years
• We’re at the forefront of this industry
Frontier Market UpsideImpact Investing
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• The Sarona Frontier Markets Fund is a Fund-of-Funds that will achieve• Profit: For investors• People: Benefit for the poor• Planet: Earth-care for our
grandchildren
IntroducingSarona Frontier Markets Fund 1 LP
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Our value propositionto investors
• We select the best private investment managers in Frontier Markets around the world to achieve
Profit, People, Planet
• And you can travel with us to visit the companies where your capital is invested
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SMEs in Southern
Africa
Renewable energy
project in India &
Philippines
SMEs in Mexico
Microfinance Banks in
developing countries
Fund Structure
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Fund of Funds: We select the best small private investment managers with a strong country or industry focus
Diversification: We don’t invest in just one or two countries; we invest broadly, knowing that some countries will flourish more than others
Micro, Small and Medium Enterprises: Our managers stay away from large cap companies. They look for growth in small and medium sized companies, including Microfinance Banks
Profit, People, Planet: We invest in fund managers that aggressively target a triple bottom line
Fund benefits Strategy
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Evergreen Offering: Sarona will allow investors in at the end of each calendar year
Liquidity: Unlike most private investment funds, Sarona offers each investor an annual redemption opportunity after a three year hold period
Experience: We invite you to join us on due diligence or management trips to various countries. Don’t leave your money to others – see where your money goes!
Fund benefits Investor Experience
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Frontier Market Upside: You may have missed the extra growth spurt of the past 46 years, but you don’t want to miss the future!
Returns: We target a net financial return to investors of 15% over the long run. Annual ROI for investors will start at 5% and grow from there. You’ll also know that your capital is benefiting people and improving the environment
Fund benefits Results
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• Berkeley Energy Partners: – Renewable energy in India, Philippines, based in UK and India
• Ariya Capital: – Microfinance, Renewable Energy, Telecom in Southern
Africa, based in UK and Botswana • MicroVest Capital Management:
– Microfinance Banking, Global, based in Washington• Ignia Fund:
– Housing, health, agro-processing SMEs based in Mexico• Colombia Opportunities Fund:
– Tourism, agro-processing, ICT, clean tech SMEs based in Colombia
• Sorenson Housing Fund: – Affordable Housing Projects in India, based in the US and in
India
Pipeline 2009 and early 2010
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• Investing in Frontier Markets since 1953: – First investment = Sarona Dairy in South
America– Continued direct investment for 56 years
• Last 12 years, (co-)founded: – Latin America Challenge Investment Fund– MEDA Investments Inc, Sarona Funds– MicroVest Funds
Why us?A track record in innovation and leadership
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Why us?A track record in growth
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Why us?A track record in social impact
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Why us?A track record in performance
Every Fund has achieved or exceeded targets
– Latin America Challenge Investment Fund, debt for Microfinance Banks, 1999-2008: >8%
– Sarona Group:• Sarona Risk Capital Fund (MEDA), high risk, early
stage capital for experimental companies: >8%• Sarona Risk Capital Fund I LP: 5%
– MicroVest Group:• MicroVest I LP: 80/20 debt/equity for Microfinance
Banks, 2004-2008: 9%• Micro Access Trust CDO, 2006: 8%
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Why us?A global network
Our relationship with MEDA provides us with a network of over 3,000 business professionals in over 40 countries
• Domestic: The MEDA business association provides access to 2,900 businesspeople in Canada, USA, Europe – Self-selected group of entrepreneurs who know and care
• Global: The MEDA economic development institute provides access to over 250 business development professionals in over 40 countries
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• Assets under Management in funds and directly in companies: almost $200 million
• 56 year track record of success: – In 2008, stock markets crashed– Our funds posted profits of 4% - 9%
Why us?Integrity to our investors
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We need Leaders like you
MEDA has invested $2.5 million as a founding investor
We seek Named Founding Investors:• 8-10 investors at $1+ million
We seek investors: • min invest = $100,000
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Invitation to Join us as a Named Founding Investor
• Commit $1+ million as Founding Investor
• Named as Founder in presentation material and PPM, in perpetuity
• Invitation to Founder’s Council• Opportunity for partial ownership of
GP• Invitation to travel with management
team
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Investor Term SheetTerms and Conditions
Terms and Conditions Description
Investment offering Evergreen, annual closings on Dec 31st
Structure Limited Partnership
Minimum investments $100,000
Availability Accredited investors
Cash Call 100% at closing
General PartnerManager
Sarona Frontier General Partner Inc.Sarona Asset Management Inc.
Annual ROE, net of fees Growing, from 5% in first 2-3 years, to 15% in years 5-8
Management Fee 1.45% pa on assets under management
One-time up-front fee 1% on committed capital (except 2009)
Income allocation First 6% to investor; thereafter 80% to investor, 20% to GP. Only paid to GP on investor exits
Exits Full or partial redemption, after 3 year hold, subject to liquidity, on Dec 31st of each year
