Emerging Markets

The Emerging Markets activities consist of the management of internationally operating funds that invest in emerging markets in Latin America, Africa, Asia and Eastern Europe.

The goal of the microfinance and sustainable trade funds is to contribute towards the development of inclusive financial sectors in developing countries that improve lives by providing financial services in a transparent and responsible way, to encourage trade in certified fair trade and organic products, and to stimulate sustainable agriculture.

At the close of 2011 all funds operating within this theme managed a total of EUR 390 million, an increase of 23.1%.

Microfinance

Since 1994, our assets under management in the microfinance sector have increased to EUR 360 million, making us one of the leading investors in the industry (impact statistic)

The four Triodos microfinance funds financed 95 microfinance institutions, in 43 countries. These institutions reach over 7.9 million low-income clients with loans and 7.5 million people with savings products. Total assets under management with the four microfinance fund was EUR 362 million.

The four Triodos microfinance funds hold equity stakes in 19 leading and innovative microfinance institutions and vehicles worldwide. Senior staff of Triodos Bank have a seat on the Board of Directors, sharing valuable knowledge and expertise in sustainable banking.

Portfolio Triodos Microfinance Funds

31 December 2011

Early 2011, a group of more than 40 global investors signed the Principles for Investors in Inclusive Finance. With these principles, investors help shape an inclusive financial services industry that keeps the interests of its low income clients at its core. The principles is the initiative of a core-group of investors, amongst which Triodos Investment Management and HRH Prinses Maxima the UN Secretary-General’s Special Advocate for Inclusive Finance for Development. The launch took place at the Responsible Finance Forum, hosted by the Dutch Ministry of Foreign Affairs in The Hague, the Netherlands.

Triodos Investment Management strongly believes in the successful role microfinance will play in reaching global sustainable development goals.

Triodos SICAV II-Triodos Microfinance Fund (Europe)

2011 was the third year of operation for Triodos SICAV II-Triodos Microfinance Fund. The fund is open to institutional investors, high net worth individuals and private banking clients across Europe.

In 2012 the fund will also open to retail investors through the Triodos Investment Management distribution channels.

Net assets grew by 53.5% to EUR 94,7million at the end of 2011, while its portfolio reached a value of EUR 71.2 million (75.2% of the fund’s net assets). The fund increased the number of its investments to 28 microfinance institutions (MFIs) and one investment fund and further diversified its geographical spread by adding three new countries to its portfolio, which now totals 19 countries in Latin America, Asia, Africa and Eastern Europe. The fund achieved a return of 6.1%.

Triodos Fair Share Fund (The Netherlands)

Triodos Fair Share Fund closed 2011 with a strong growth of 28.4% to EUR 122.5 million.

The fund invested in 43 microfinance institutions in 25 different countries in Latin America, Asia, Africa and Eastern Europe. Investors continued to enjoy the fund’s tax benefit during 2011.

The fund achieved a return of 5.4%, excluding a 2.2% tax advantage for Dutch private investors.

Stichting Triodos-Doen (The Netherlands)

Triodos-Doen Foundation (Triodos-Doen) began in 1994 as a partnership between Triodos Bank and DOEN Foundation.

Triodos-Doen invests in relatively high risk and new emerging financial institutions with a focus on difficult to reach target groups and underserved geographical areas. In 2011 a five-year strategy was approved that sharpens its vision and mission on sustainable banking in developing countries. This approach is underpinned by Food and Agriculture and Energy and Climate sustainability themes within the financial sector.

In 2011 Triodos-Doen increased its total assets by 6.4% to EUR 81.5 million.

Stichting Hivos-Triodos Fund (The Netherlands)

Hivos-Triodos Fund Foundation (Hivos-Triodos Fund) was founded in 1994 as a partnership between Triodos Bank and Hivos. The non-profit structure and the cooperation with Hivos allow the fund to accept higher than average risks to enable innovative investments.

Hivos-Triodos Fund invests in microfinance institutions with a higher risk profile and active in underdeveloped markets that focus their services on vulnerable target groups. Building on the specific knowledge and experience present in Hivos and in Triodos Bank, Hivos-Triodos Fund has reserved funds for financing broad sustainable developement in developing coutries in the coming years. The focus will primarily be on sustainable energy and agriculture.

In 2011 the fund increased its total assets by 6.4% to EUR 70.0 million.

Sustainable Trade Finance (Europe)

Triodos Sustainable Trade Fund provides trade finance to both cooperative and private agricultural exporters in developing countries, producing certified organic and/or fair trade products.

In 2011 the fund’s volume of trade finance transactions increased by 24% to EUR 28 million. In total 36 loans were made benefiting 33 cooperative and private exporters, producing 16 different agricultural products in 27 countries. Products financed include coffee, cotton, cocoa, olive oil, cashew nuts, sesame seed and sugar.

Triodos Sustainable Trade Fund receives most of its funding from a credit facility provided by Triodos Bank, which is partly secured by guarantees from Dutch and international governmental and non-governmental organisations. Founding partner Hivos allocated additional guarantee capital to the fund at the end of December 2011. This has enabled in an increase of the Triodos Bank credit line with EUR 3 million.

Case Study

The first ever impact report produced by Triodos Investment Management for one of its funds was released in September 2011. Triodos Sustainable Trade Fund published the Impact Report 2010 as a first attempt to document its results in terms of realising its mission: to improve the lives of small-scale farmers and stimulate sustainable agriculture in developing countries. Some of the key stats for 2010:

  • 116,272 small holder farmers worldwide sold their harvest to organisations benefiting from trade finance from the fund
  • EUR 2 million premium (or uplift in income) was paid to farmers by selling their products to organisations financed by the fund
  • 16.9 million malaria curing treatments can be produced from Artemisinin prefinanced by the fund

Emerging Markets Prospects for 2012

Triodos SICAV II Triodos Microfinance Fund, Triodos Fair Share Fund, Stichting Triodos-Doen and Stichting Hivos-Triodos Fonds expect to grow by at least EUR 40 million to more than EUR 400 million in 2012.

In 2012 it is foreseen that Triodos Sustainable Trade Fund will be restructured to allow more investors to participate in the financing of sustainable agriculture and trade. The fund projects to grow its portfolio by between 20% and 30%.