FUND STRUCTURE

 

The Venture Fund

The initial closing of Fondo EcoEmpresas, S.A. is US$10 million.  The Fund invests in small- to medium-scale environmentally compatible enterprises in Latin America and the Caribbean.  The Venture Fund invests in companies at all stages of development with sales revenues up to US$3 million.  Investments range from US$50,000 to US$780,000, with an average investment of US$325,000.  The Venture Fund finances up to 50 percent of the individual project costs.  Financial exposure to any one venture must be less than 12 percent of the Fund's total committed capital and not more than 20 percent to one or more companies in an affiliated group.

We are able to provide flexible financing to promote the long-term success of each venture.  The investment team works with the project principals to creatively structure deals using a variety of instruments, including:

  • Minority equity participations
  • Subordinated debt with equity features
  • Debt securities
  • Combinations of these instruments.

We make decisions regarding financing instruments based on several criteria, including:

  • Needs of the enterprise
  • Potential benefits to conservation
  • Other environmental and social aspects of the project
  • Economic and financial situation of the country
  • Projected rate of return
  • Development stage of the enterprise

For exits on the equity, the Fund negotiates buyouts, sales of companies, and payouts through earnings.

The Venture Fund will make investments in approximately 20 business ventures by 2010.  We seek a targeted return of 18 to 20 percent on equity investments and lower returns on debt instruments. 

The Venture Fund is incorporated as a Panamanian investment company, Fondo EcoEmpresas, S.A.

Technical Assistance Fund

The Nature Conservancy, contracted by the Fund to provide fund management services, operates a Technical Assistance Fund that covers fund management costs and provides business advisory services to prospective and portfolio projects.  For more information on the Technical Assistance Fund, please visit www.nature.org/initiatives/programs/ecofund/about/.  

Fund Management

The Fund has contracted The Nature Conservancy to provide fund management services.  The fund management team consists of employees of The Nature Conservancy and operate the EcoEnterprises Fund through a distinct fund management unit based in San Jose, Costa Rica.  The team, staffed by finance professionals from Latin America and the Caribbean, reviews investment proposals and works closely with portfolio businesses to assure success.

An experienced Investment Committee and Board of Directors oversee the Fund's activities.

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