third billion fund proposal

Third Billion LLC

870 millionwomen between

ages 20 and 65

live outside the

economic system

*Source: Study by Booze & Co. Aguirre, DeAnne, and Karim Sabbagh. "The Third Billion."Strategy+Business May 2010

*

China

India

By 2025…*

*Source: "Home | The Third Billion.” <http://thethirdbillion.org/>.

Women in management positions have 35% greater return on equity*

Investing in women is smart economics

When at least 10 % of a country's girls attend school, its GDP

increases on average by 3%*

Women reinvest 90% of their income in families and communities*

*Sources: Study by the OECD, “DAC guiding principles for aid effectiveness, gender equality and women’s empowerment”, Endorsed by the DAC

Senior Level Meeting, December 2008

“The economic power of women” Calvert Foundation http://www.calvertfoundation.org/the-economic-power-of-women

No property rights No land rights Labor policy

discrimination Market restrictions Unequalaccess to education Unequal pay

Discrimination at workplace Poor childcare services

Lower status of women in society Poverty Lack of

critical resources Denied credit Fewereducational opportunities No access to market

Social restrictions Gender disparities Unableto participate in the supply chain Lack ofentrepreneurial opportunitiesUnequal access to vocational education Lack accessto basic banking services Limitedentrepreneurial skills No access to market

Fin

an

cia

l R

etu

rn

Legal Protection

Fund

Growth SMEs

Fund

Higher

Education

Fund

Social

Return

Return: 15%

Return: 7%

Return: 2%

Retirement and Pension Funds

Family Foundations

University Endowments

Equity

Debt

PRI

A Tiered Investment Fund

India

HO

LIS

TIC

AP

PR

OA

CH

Access to

Legal Protection

Access to

Capital

Access to

Higher Education

STAGGERED IMPLEMENTATION

Year1 Year 3 Year 7

� Economic Potential

Geographic Focus on Latin America

� Synergies

� Team Networks

60% of

Latin American

Women*

*Source: IHS Global Insight

Mexico

Colombia

Brazil

Enhance economic contribution of women by investing

in their education, entrepreneurship, and legal protection

THIRD BILLION LLC

Higher Education Fund

� Debt capital in financial

institutions and social

enterprises

� Providing student loans to low

income and talented women

� Promote programs that develop

entrepreneurial capacity

Country Tertiary School Enrollment Rate in 2010*

Mexico 26%

Colombia 40%

Brazil 41%

*Source: World Bank’s World Development Indicators

Phase I Phase II Phase III

DianaDiana

Mexican Mexican

Engineering StudentEngineering Student

� Fund Size: $60 million

� IRR (interest rate): 7%

� Investment Size Range:

$5 – $20 million

�Hold Period: 5 years

� Target: 2,000 students

�Management fee: 1.5%


Oriana, ColombianOriana, Colombian

MBA Student in the USMBA Student in the US

Growth SMEs Fund

EvaniaEvania, Brazilian, Brazilian

Goldman’s 10,000 WomenGoldman’s 10,000 Women

Gardening Tools CompanyGardening Tools Company

� Equity capital in growing Small

and medium size companies

� Led by women or providing

valuable goods and services

to low-income and vulnerable

women� Areas: maternal health, housing,

nutrition, among others


LeilaLeila

BrazilianBrazilian

CEO of Beleza NaturalCEO of Beleza Natural


� IRR: 15%


$0.5 – $5 million

�Hold Period: 5 to 7 years

� Life of Fund: 7 years



Legal Protection Fund

SimoneSimone

Goldman’s 10,000 Goldman’s 10,000

Women FellowWomen Fellow

Gardening ToolsGardening Tools

� Debt (PRIs*)

� NGOs helping women� Accessing Institutions

� Using Property

� Getting a Job

� Building Credit

� Going to Court


* Program Related Investments

RenataRenata

BrazilianBrazilian

Federation of Domestic WorkersFederation of Domestic Workers



� IRR (interest rate): 0%-2%


$50,000 to $110,000

�Hold Period: 5 to 7 years


LauraLauraMexicanMexicanIndigenous Women’s HouseIndigenous Women’s House

3rd Billion Partners Brazil Mexico Colombia

Women Support

Networks

Incubators &

Accelerators

Events and Business

Plan Competitions

Impact Investors

Third

Billion

LLC

1. Women enrolled

2. Women completed

1. Female low-income clients (and total)

2. Female jobs maintained and created

3. Female shareholders

1. Women provided legal advice

2. Degree of change in legislation

Third Billion LLC will use GIIRs for:

• Transparency and accountability

• Monitoring and comparing impact

• Identifying potential investees

Monitoring and Evaluating Impact on Women

Thank You

Appendix

Summary: Structure and Timeline

Tier Mission Asset ClassExpected

ReturnRisk

Hold

PeriodMgmt Fee

T1Access to

EducationDebt 7%

Medium

to Low

3 to 5

years1.5%

T2Access to

CapitalEquity 15%

Medium

to High

5 to 7

years2.5%

T3Access to

Legal ProtectionPRI 2% Low

5 to 7

years0.5%

3 years 7 years 15 years

T1: Access to Higher EducationT1: Access to Higher Education

T2: Access to CapitalT2: Access to Capital

T3: Access to LegalT3: Access to Legal

Organisational Structure: Investment Team

Investment Committee

Managing Directors (2)

Business Development

(1)

VPs and Principals (2)

Analysts and Associates

(3)

CEO Advisory Board

(2/3)

CEO Advisory Board

(2/3)

Risks & Contingencies

Risk Contingencies

No secondary market

Lack of liquidity

� Companies with sustainable positive cash flows

� Diversification of investees (geographies, sectors

and individual assets.)

Lack of track record� Experienced management team

� Established approvals and monitoring process

� GIIRS rating

Mission Drift � Alignment of financial performance with

demonstration of social impact

Potential of a Loss� Diversified nature of fund’s borrowers, rigorous

selection criteria, track record and reputation of the

fund manager

The 3rd Billion Fund will provide PRI to institutions whose missions

address the following challenges*:

• Accessing Institutions: improve women’s ability to interact with public authorities and

the private sector in the same way as men

• Using Property: improve women’s ability to access and use property based on the

ability

• Getting a Job: reduce restrictions on women’s work, such as prohibitions on working

at night or in certain industries. This indicator also covers laws on work-related

maternity and paternity benefits, retirement ages, sexual harassment and equal pay

for equal work

• Building Credit: reduce minimum loan thresholds in private credit bureaus and public

credit registries, and improves tracking bureaus and registries that collect information

from microfinance institutions;

• Going to Court: improve the ease and affordability of accessing justice (small claims

courts, as well as a woman’s ability to testify in court and initiate court

proceedings.

Example - Improving Legal Representation

* Source 1: Study by IFC. “Removing Barriers to Economic Inclusion.” Women, Business and the Law 2012

* Source 2: UN Women Report. “Progress of the World’s Women: In Pursuit of Justice.” UN Entity for Gender Equality 2011-2012

Multiplier Effect: With less legal gender differentiation,

more women work, own or run businesses*

Improving Legal Representation

* Source: Study by IFC. “Removing Barriers to Economic Inclusion.” Women, Business and the Law 2012

Sandra HalilovicEvgenia SokolovaGenia is pursing a Masters of Public

Administration degree in

Development Practice at Columbia

University. Previously, Genia

worked as a Vice President of

Credit Portfolio Management and

Research in the Natural Resources

Team at JP Morgan Chase.

She graduated from Mount Holyoke with a Bachelor’s

degree in Economics (cum laude) and received an

International Relations Certificate from Sciences Po in

Paris. Originally from Moscow, Russia, Genia lived in

Canada, the US, UK and France.

Sandra is a Masters of

International Affairs’ Candidate at

Columbia University, concentrating

in International Finance and

Economic Policy (Finance track).

Vladimir is a Masters of Public

Administration’s Candidate at

Columbia University, concentrating in

Economic and Political Development.

Currently, he also serves as President

of Columbia Impact Investing Initiative

and Director of the Center for Social

Entrepreneurship HUB Bogota.

Helene is a Masters of International

Affairs’ Candidate at Columbia

University, concentrating in

Sustainable Energy Policy. Prior to

her current studies, she received a

Masters degree

Vladimir OlarteHelene Roy

Sandra carries 5 years of professional experience, working in

investment banking in New York and London, in emerging

market consulting, and for the World Bank’s International

Finance Corporation.

She graduated from the University of Virginia's McIntire

School of Commerce with a B.S. in Commerce, concentrating

in Finance. Originally from Bosnia, Sandra lived in Croatia,

Norway, the US, and UK.

Prior to attending the MPA program, Vladimir worked for

5 years as a consultant at Kaiser Associates Latin America

and 2 years as the Lead Consultant of Invest Hong Kong in

South America. Originally from Colombia, Vladimir has

lived in Brazil, the US, China, and South Africa.

in Management from Audencia Nantes School of

Management in France.

Helene has 3+ years of professional experience in the

investment management industry most recently at UBS

and Amundi Alternative Investments.

Helene is originally from France.

third billion fund proposal

Economy & Finance