The three funds, Danish Microfinance Partners (Fund I), Maj Invest Financial Inclusion Fund II and Maj Invest Financial Inclusion Fund III, invest in financial institutions, financial companies and financial service providers servicing client groups below the middle class in selected countries in Latin America, Asia and Africa.
The funds invest with equity in private financial institutions in the growth stage in the well-established top segment of the sector. There are an estimated 500-600 relevant targets that will increase as the sector grows.
Targets have a profitable track record, a high operational efficiency, an effective distribution system and a strong funding base. It is essential that targets have the potential to achieve an attractive return on equity of about 20-25% by participating in the sector’s growth. They are well governed by experienced management and have likeminded co-shareholders as well as a strong social mission. All targets are regulated by national financial regulators and audited. The funds are significant minority investors typically acquiring 10-30% ownership positions in financial institutions with a fair market value of around USD 50-300 million and a gross loan portfolio of above USD 100 million. The average holding period is 5-7 years. The funds always seek Board representation and minority protection rights with a strong exit strategy together with likeminded co-shareholders.