Sagicor anchoring investment in new SME Caribbean Growth Fund
From left: Kevin Donaldson, CEO, Sagicor Investments; Bert van der Vaart, Co-founder and CEO, Small Enterprise Assistance Fund (SEAF); Dr Nigel Clarke, Minister of Finance and the Public Service; Christopher Zacca, President and CEO, Sagicor Group Jamaica at the SEAF Caribbean SME Growth Fund launch recently.
Sagicor Investments, in partnership with SEAF, a Washington-based investment management company recently launched the SEAF SME Caribbean Growth Fund to benefit small and medium-sized enterprises (SMEs) in Jamaica and the Caribbean.
With an initial capitalisation of US$47 million, the SEAF Caribbean SME Growth Fund will address the risk capital financing and business advisory needs required for growth of entrepreneurs and small and medium-sized enterprises in the CARICOM region.
The fund will invest growth capital in up to 15 SMEs for both market returns and social impact in Jamaica, Guyana, Trinidad and Tobago, Barbados and other eastern Caribbean states.
Anchor investor, Sagicor Investments - through the Sigma Venture Fund has injected capital of US$20 million, while SEAF has invested US$2 million. The remaining capital was sourced from the Unit Trust Corporation in Trinidad and Tobago, Development Bank of Jamaica, Sandals (ATL) Pension Fund and the Royal Bank of Canada.
Speaking at the launch of the SEAF SME Caribbean Growth Fund at Sagicor’s head office in Kingston, CEO and Co-Founder of SEAF, Bert van der Vaart said the investment management company noted though the region possesses a high degree of human capital and innovation, it lacked institutional equity capital and active business partnerships.
“We have been tracking the region since 2007, we know the banks had been active but we saw that debt financing needed a complementary equity position. Equity is definitely underserved in the CARICOM region, particularly among the SMEs,” van der Vaart said.
SEAF believes a dedicated private equity fund, coupled with SEAF’s global network and tested value creation programmes, can provide catalytic growth in the region and help develop the next generation of entrepreneurs, van der Vaart added.
For his part, President and CEO of Sagicor Group Jamaica, Christopher Zacca said Sagicor was pleased to lead the charge with SEAF to develop a new asset class for Jamaica and the Caribbean.
“When I began my tenure as President and CEO of Sagicor two years ago, I committed to building on the company’s strong tradition of innovation. The launch of this fund is our latest effort to do just that. Through Sagicor Investments - the investments arm of our business, we are continuing to take bold steps to bring innovation to the capital markets in the region,” he said.
This new asset that will generate the type of returns suitable for Sagicor’s pensions and other long-term investors while also providing the diversification to promote growth, Zacca added.
Minister of Finance and Public Service, Dr Nigel Clarke, described the launch of the SEAF SME Caribbean Growth Fund as a “signature moment” for Jamaica.
Clarke also lauded Sagicor for taking the bold step to partner with SEAF in order to continue support Jamaica’s economic growth. He said, with Jamaica now experiencing an economic turnaround, the government must create an enabling environment for businesses to thrive.
“It’ is important that the environment we create in this transition, is an environment that is market based, market oriented - where the allocation of capital is done on a private basis and where we depend on the private sector to be the engine of growth,” Minister Clarke said.
Sagicor will provide SEAF with its nearly 50 years of experience and local knowledge necessary for the fund to achieve success. It will chair the Fund’s advisory committee and plan to play an essential role in developing the Fund’s pipeline of portfolio companies.
In addition, Sagicor Investments is in discussions with SEAF to launch a joint innovation fund which will further enable the regional financial institution play a role in developing even smaller-sized businesses that are on the cutting edge.
In the meantime, SEAF will set up office in Kingston, headed by Leo Williams as Managing Director. Williams is a seasoned investment professional with 25 years of experience in investment and business consulting. Prior to joining SEAF, he founded Williams & Associates, an investment advisory firm focused on Jamaica and the wider Caribbean region.
The fund management team will be supported by SEAF’s Global Investment Committee, a seven-member team that provides advisement on the full investment cycle of SEAF funds.
SEAF invests institutional and impact capital into enterprises which provide commercial returns and social impact across themes of access to education and healthcare, clean energy, agribusiness, women’s economic empowerment, and financial and technology inclusion. It has operated 40 funds around the world with total capitalisation of US$1.3 billion.