SEAF Macedonia

SEAF Macedonia II

Dejan Kalinikov Managing Director

Skopje May, 2016

Small Enterprise Assistance Funds

SEAF Macedonia

Outline

• About SEAF

• SEAF Macedonia I – Overview

• SEAF Macedonia II – Overview

– Investee benefits

– Investments

• Investment process

SEAF Macedonia

A Global Leader in Impact Investing

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SEAF Impact Investment Track Record (as of 12/31/14)

35 Funds Raised and Managed

US$ 387 Million Invested More than 70 global

investors

398 Investments US$ 325 Million under

Management 13 CEED centers

238 Exits US$ 694 Million

Committed Capital

• SEAF is an investment management group that provides growth capital and business assistance to SMEs in emerging and transition markets underserved by traditional sources of capital.

• SEAF invests in entrepreneurs seeking to build successful businesses, hoping to realize both attractive returns for our investors and a measurable development impact in local communities.

SEAF Macedonia

A Global Network

• Active footprint in 26 countries

• 180 investment professionals worldwide

• CEED network of more than 30,000 entrepreneurs

SEAF Macedonia

Partnering with Global Leaders

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Backed by leading DFIs, Institutional/Private Investors, Foundations and Philanthropic Organizations:

SEAF Macedonia

• Established in 1998 with seed capital from USAID

– Additional investors: IFC, EBRD and DEG

• Fund size: USD 13 million

– Investment range USD 200K – 1 mil (equity and quasi-equity instruments)

– Minority equity position (25% - 49%)

• 14 investments in various industries

• Exits

– MBOs

– Trade sale to strategic buyers

• Realized IRR of the fund

– Gross IRR 22%

– Net IRR 9%

SEAF Macedonia I

SEAF Macedonia

SEAF Macedonia II

In partnership with:

Homestrings Diaspora Bond:

SEAF Macedonia

• Launched in 2014

• Current committed capital in excess of USD 4 million

– Targeted fund size USD 10+ million

– First Fund to feature the USAID DCA – backed Diaspora Bond offering

• Investment policy

– Investment range EUR 500K – 1.5 mil (combination of equity, quasi-equity and debt instruments); smaller investments with strong potential can be considered as well

– Minority equity position (10% - 49%)

– Targeting SMEs with high growth potential and capable management

– Exit in 3 – 7 years

– Broad range of industries considered

• Active partner approach

– Value-added services provided to the investees (marketing, strategic and financial management)

SEAF Macedonia II - Overview

SEAF Macedonia

Investee benefits

Means to finance fast growth and expansion

Strong and capable local team of professionals

Access to industry experts, training programs, banks

Access to SEAF network

SEAF’s approach in adding value to the company

SEAF Macedonia

• First Investment - Aronija

– An organic and gluten free food processing company

– Products offered under the brand Bio Cosmos

– Distribution through own retail network and major supermarket chains

– Investment of EUR 200K (mezzanine structure)

– Strong growth history

– Sales revenues growth of 20+% following SEAF investment (2015 vs. 2014)

– Number of employees doubled

– New products launched

– Export

SEAF Macedonia II - Investments

SEAF Macedonia

• Second Investment - AMC

– Computer & Electronics retailer

– Well recognized brand in Macedonia

– 17 stores across the country (3 in Skopje)

– More than 110 employees

– Market leader in the IT retail segment (more than 40% market share)

– Growth history

– Investment of EUR 0.9 mil (combination of equity and loan)

– Strong growth in Q1 2016, following SEAF investment

SEAF Macedonia II - Investments

SEAF Macedonia

• Initial contact

– phone call, recommendation, presentation, initial questionnaire

• First meeting

• Basic criteria check

– company size, ownership structure, industry

• Management assessment

• Legal and financial due diligence, financial projections, market analysis

Investment Process 1/2

SEAF Macedonia

• SEAF offer to the company owners

– Conditional Term Sheet

• Conditional Term Sheet agreed and signed

• Approval from SEAF Global Investment Committee

• Due diligence completion

• Completion of legal documents

– Investment agreement, Articles of incorporation, Management agreements, …

• Transfer of money and registration with the Central Registry of companies

Investment Process 2/2

SEAF Macedonia

Dejan Kalinikov Managing Director dejan@seaf.com.mk

SEAF Macedonia Orce Nikolov 188-2/4

1000 Skopje Tel: (+389 2) 3091 337