SIMA Impact Invest Fund launch
Targeting the base of the pyramid to generate the most direct, tangible impact possible.
The fixed income asset class is particularly suited to impact investing, as it enables specific projects with social and/or environmental objectives to be financed directly.
SIMA Impact Investment Fund - a sub-fund of a Luxembourg RAIF - is a closed-ended fund reserved for experienced investors and launched for an initial period of three years. Its aim is to both generate financial returns and have a tangible, measurable impact on the lives of disadvantaged members of society by financing projects that seek to improve the living conditions of those communities (employment, housing, education, etc.).
This fund is the result of an unprecedented partnership between BLI - Banque de Luxembourg Investments and SIMA - Social Investment Managers & Advisors (impact investing consultancy specialists).
The Fund invests primarily in private debt issues (loan agreements, promissory notes) with the option to also invest on an ancillary basis in traditional bonds.
The Fund favours countries that have historically been underserved by more traditional microfinance initiatives. As such, the investments will primarily be focused in Asia (India, Pakistan, Bangladesh, Cambodia, Thailand and Sri Lanka) and in Sub-Saharan Africa (Kenya, Uganda and Nigeria). In the same vein, in addition to microfinance, the strategy also targets related activities that contribute towards improving the living conditions of target populations, such as education, access to energy, and financing of affordable housing, etc. The portfolio targets several Sustainable Development Goals for which various indicators will be regularly monitored.
NO POVERTY Indicator: number of microloans granted to low-income communities
QUALITY EDUCATION Indicator: number of school financing loans granted
GENDER EQUALITY Indicator: number of women targeted by the projects
AFFORDABLE AND CLEAN ENERGY Indicator: number of new connections to solar energy
DECENT WORK AND ECONOMIC GROWTH Indicator: number of new vehicles funded through loans granted to entrepreneurs who use them to generate income
PARTNERSHIPS FOR THE GOALS Partnerships with public institutions can be established at different levels:
- Investments from public institutions in a junior tranche of the Fund which absorbs any losses;
- Joint investment(s) between the Fund and a public institution in a specific project;
- Provision of a guarantee that would be triggered in the event of default.
CLIMATE ACTION Indicator: tons of greenhouse gas emissions avoided
SUSTAINABLE CITIES AND COMMUNITIES Indicator: number of affordable homes funded