CPE News (10/16/2020) – Desjardins Group has launched Aequitas fund, a private investment fund focused on impact finance which will be used to promote gender equality, combat climate change and contribute to achieving other Sustainable Development Goals (SDGs) through financial inclusion.
With $50 million solely from Desjardins Group, Aequitas fund will combine finance and development by providing the inclusive finance sector with patient capital, by first targeting small financial institutions that are too often overlooked by large investment funds and by striving for a wide geographic scope that includes Africa, Latin America and Asia.
Fonidi Management inc., a subsidiary of Développement international Desjardins (DID), will be the manager of the fund.
Desjardins Group may seek commitments from other institutional, impact, public, and private investors. Desjardins has committed to an additional $15 million following the equity investment of the first external investor.
photo credit: Développement international Desjardins (DID)
News Release
Desjardins launches a new $50 million impact fund for developing countries
LÉVIS, QC, Oct. 16, 2020 /CNW Telbec/ – Desjardins Group is proud to announce the establishment of the Aequitas fund, a private investment fund focused on impact finance which will be used to promote gender equality, combat climate change and contribute to achieving other Sustainable Development Goals (SDGs) through financial inclusion. Managed by Fonidi Management inc., a subsidiary of Développement international Desjardins (DID), Aequitas will have an initial envelope of CAN$50 million coming from Desjardins Group.
Other institutional, impact, public and private investors seeking returns that, first and foremost, focus on development, may later join Aequitas. Desjardins has also committed to an additional $15 million following the equity investment of the first external investor.
The Aequitas fund will combine finance and development by providing the inclusive finance sector with patient capital, by first targeting small financial institutions that are too often overlooked by large investment funds and by striving for a wide geographic scope that includes Africa, Latin America and Asia. This approach will allow for high-quality investments that have a significant social scope.
“Since the COVID-19 pandemic has had devastating repercussions in emerging and developing countries that affect women, young people, farmers and micro and small businesses in particular, the creation of the $50 million Aequitas fund is now more relevant than ever. By focusing on marginalized populations and helping to channel capital to those who need it most, the fund will simultaneously support sustainable economic recovery and foster diversity and inclusion,” said Guy Cormier, President and CEO of Desjardins Group.
Meeting the needs of developing countries
There are still 1.7 billion adults across the globe, the majority of whom are women, who don’t have access to a bank account. Access to financing is also generally lacking among small business owners and farmers, and among women in particular. These challenges are exacerbated by the fact that developing countries are hardest hit by climate change.
“The 600 or so projects led by DID over the past 50 years have made it clear that broader access to financial services not only boosts the autonomy and prosperity of populations, but also helps achieve a wide range of development goals such as curbing inequality, ensuring food security, promoting gender equality, fostering economic growth, driving job creation and combating climate change,” added Gerardo Almaguer, President and CEO of DID.
According to the United Nations, the total financing required to achieve the SDGs amounts to almost $4,000 billion per year and the deficit that must be made up to achieve the SDGs in developing countries alone is an estimated $2,500 billion per year.
Aequitas, innovation for productive change
The investment approach of the Aequitas fund will be based on thorough analysis of the assessed institutions’ financial soundness, their social scope and the measures they’re taking to contribute to gender equality and environmental protection.
Using this approach, the fund will direct resources where they’re likely to have the greatest possible impact, within segments that have been identified as priority: small institutions, particularly those in geographic areas that are poorly served, thereby focusing on the sustainable inclusion of women and disadvantaged populations.
Not only will the investments made possible through the fund directly support the growth and good governance of beneficiary institutions, but they may, in certain cases, be combined with technical assistance, which will enhance their impact on capacity building and achieving the target development goals.
DID: a leader in the field of impact investing for over 20 years
Through its Fonidi Management inc. subsidiary and on its own initiative, DID has been active in the field of impact investing in developing countries since 1998. Over the past 22 years, FONIDI Management Inc. and DID have engaged in a total of 61 disbursement-related financing and investment transactions that represent CAN$64 million, and supported 45 financial institutions and funds in the inclusive finance sector. This has allowed the supported organizations to secure 9 times more financing and capital from additional partners, thereby generating significant leverage.
About Desjardins Group
Desjardins Group is the leading cooperative financial group in anada and the sixth largest in the world, with assets of $349.9 billion. It has been rated one of Canada’s Top 100 Employers by Mediacorp. To meet the diverse needs of its members and clients, Desjardins offers a full range of products and services to individuals and businesses through its extensive distribution network, online platforms and subsidiaries across Canada. Ranked among the world’s strongest banks according to The Banker magazine, Desjardins has one of the highest capital ratios and credit ratings in the industry.
SOURCE Desjardins Group
For further information: (media inquiries only): Desjardins Group Public Relations, 514-281-7000 or 1-866-866-7000, ext. 5553436, media@desjardins.com; France Michaud, Director of Communications, DID, 418-835-2401, ext. 5566026, france.michaud@did.qc.ca