SEAF launches new private equity fund in the region for SMEs

...It is said that this fund will break the power of borders in the Caribbean

BY KELLARAY MILES
Business reporter
milesk@jamaicaobserver.com

Friday, October 25, 2019

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Small Enterprise Assistance Fund (SEAF), an American-based investment management company partnering with Sagicor Investment, has moved to develop a private equity fund for small and medium-sized enterprises (SMEs) in the Caribbean.

The fund is expected to address the risk capital financing and business advisory needs required for the growth of entrepreneurs and SMEs in the Caricom region.

Commencing with a US$40 -million capital injection, which is expected to be upsized to US$100 million later on, the fund will invest growth capital into potentially viable SMEs in hopes of securing market returns and social impact, providing capital ranging from US$3 million -US$7 million per company.

Bert van der Vaart, CEO and co-founder of SEAF, while speaking at the launch of the fund held at the Sagicor Auditorium on Wednesday, said that they were happy to be a part of this Caribbean initiative.

“This is our 40th investment fund having served in 35 markets around the world with a total of US$103 billion in venture capital. We saw that there was debt financing needed, equity is underserved in the Caribbean nations particularly to SMEs,” he said.

The fund, which will be based in Jamaica, will be led by Sagicor Investments and will target companies in the English-speaking countries of the Caribbean common market, liaising with representatives in Trinidad and Tobago, Guyana and Barbados.

Christopher Zacca, president and CEO of Sagicor Group, expressed that it was a huge pleasure for his company to be sharing in the launch and be partnering with SEAF in this private equity fund, which will help to grow businesses in the region.

“We're very excited to be leading the way with our new partners to develop this asset class for Jamaica, one that will generate the type of returns suitable for pension funds by providing diversification to promote growth. Local companies will be provided a new mechanism in which to expand their operations to other parts of the region and beyond with this new-found equity capital, and SEAF's 30 years of experience and wide geographic reach will aid this expansion,” he shared.

“This fund will provide opportunity for Sagicor Investments to further strengthen the economy, capitalise business growth and engage SMEs that truly drive the economy. We do believe that the launch today of the Caribbean growth fund is the beginning of a very long and fruitful partnership with SEAF,” he further mentioned.

He also disclosed that Sagicor is currently engaging SEAF in further discussions to launch a joint innovation fund which will further enable them to play a role in developing even smaller businesses that are on the cutting edge locally.

Sagicor's boss, in further commending the move, said that he is very happy that his company is leading the charge and taking bold steps in bringing innovation to the capital markets in the entire Caribbean region.

“We firmly believe that this equity capital will work on the region's strong potential for economic growth. As a region we have lacked institutional equity capital in active business partnership and this fund hopes to change that narrative.”

Nigel Edwards, executive director of the Unit Trust Corporation of Trinidad and Tobago, also endorsed the sentiments by adding that one important thing that the fund will do is break the power of borders.

“This fund will transform the economies of the Caribbean, viewing the Caribbean as a single economic platform, looking for good business to invest in irrespective of geographical margins,” he said.

Kevin Donaldson, CEO of Sagicor Investments, added that “This fund is for the Caribbean and what the Caribbean should be; we're not just a tourist destination, we can be so much more.”

“I think Jamaica and the Caribbean have the opportunity to get things right. This is the chance to make the Caribbean and Jamaica become a centre of innovation and excellence,” he stated.

Minister of Finance and Planning Nigel Clarke, who was in attendance at the launch, deemed it a signature move for Jamaica and the region.

Headquartered in Washington, DC, SEAF manages private equity funds in emerging markets through a network of offices around the world. For more than 20 years they have been supporting the sustainable growth of SMEs through structured debt and equity growth capital and extensive post-investment business development assistance.


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