MEDA in the News

Face to face: Mentoring an emerging fund manager

Source: "Face to Face: Mentoring an Emerging Fund Manager" by Melwin Dcosta in the summer 2015 issue of The ILPA News

In emerging economies, SMEs play a pivotal role in driving sustainable economic growth and employment. However, "access to capital" has been identified as one of these SME's key obstacles to growth. Venture capital and private equity funds in these economies that invest in local SMEs can play a critical role in bridging investible capital with opportunities in their market.

First-time fund managers face many challenges that prevent them from fully participating in the global sector, most problematic being able to overcome the stigma of being labeled a first time fund and convincing investors beyond home borders of the investment-worthiness of their funds. Funds without an established track record have a tough time making a strong case for international investors.

Structured mentorship is a critical mechanism for imparting knowledge and for exploring ways to build the confidence of institutional investors in a fund manager. Enlightened fund managers are very interested in opportunities to test their fund strategies and plans with a mentor who can be an external and unbiased resource. Fund managers benefit from having an unbiased sounding board for their investment pitches and fund messaging, as well as to review their own fund investment processes and governance. They benefit from having an expert viewpoint on how best to navigate the processes set by investors. Mentors are fund managers who have already travelled down the path the mentee has only just begun. Mentors with extensive sector experience can easily pick out chinks in a fund and point out misalignments, bringing a valued investor perspective. Mentors serve as a strategic sounding board for business and investment strategies and help shape plans.

Key Areas of MentorshipIn 2013, the Government of Canada, through Global Affairs Canada (GAC), supported the formation of a unique program called Impact Investing in Frontier Markets (INFRONT) to support sustainable development in frontier and emerging markets. Through the initiative, the Government of Canada made a $14.5 million investment commitment and also provided $5 million to launch both a Sustainability Innovation Grant (SIG) and a mentorship program. The INFRONT Global Fund Manager Mentorship Program is an innovative pubic-private partnership between three Canadian organizations – Mennonite Economic Development Associates (MEDA), Sarona Asset Management and the MaRS Centre for Impact Investing – and the Government of Canada. It matches seasoned North American venture capital and/or private equity managers as mentors with high-potential private equity fund managers based in frontier and emerging markets.

In the year since the launch of the program, interest in this mentorship opportunity has come from Guatemala, Mexico, Sao Paolo, Nairobi, Phnom Penh, Nepal, Mumbai, Colombo and Poland. While the contributed value varies from fund to fund, value from the mentorship opportunity is aways connected with needs of the fund, and matching those needs with a mentor's experience. By giving back to the industry, mentors are contributing to the long­-term sustainability of the asset class.

The INFRONT Global Fund Manager Mentorship Program has built a roster of mentors with a wide array of experiences and skills, and it plans to add to this roster in 2015. Mentors are seasoned private equity and venture capital professionals based in the United States or Canada who have over 10 years of experience managing their own funds in North America and preferably with experience raising capital. The program covers all of the mentors' travel costs.

Raising funds for women farmers in Ghana

Source: "To raise funds for a project for female farmers in Ghana" in UpBeat

Sarah French and Mary Fehr are taking a bike trip across Canada they call "Bike to Grow," to raise funds for a project for female farmers in Ghana.

Sarah says, "We are doing this 8,710 km trek because we believe in an NGO called the Mennonite Economic Development Associates (MEDA). I went to Nicaragua with MEDA as an intern in 2013/2014 to work on sustainable development in agriculture. I had lived in Argentina with Rotary in 2007/2008 and in Spain 2011/2012 as a university exchange, but in Nicaragua I really got to see poverty for the first time, firsthand."

Sarah adds, "I was travelling to remote areas and interviewing farmers who were in the MEDA project to see the influence the program had on the individuals. I also rented a room from a very poor Nicaraguan family. I was personally touched by the issues they face. Along with poverty, I also saw a huge inequality for females. "

Mary was in Tanzania with MEDA and kept in touch with Sarah, talking about these kind of issues they witnessed and faced. They decided it would be symbolic with two girls biking across Canada to support another MEDA project that focuses on female independence. This project is called Greater Rural Opportunities for Women (GROW) in Ghana.

"I fully trust MEDA because I saw the work they did firsthand and the passion that employees have for helping. 100% of all funds are going to the GROW project. Mary and I will be paying for are own airfare, etc. We've already bought our bikes and have been training," says Sarah.

Their travels will be from May 15th 2015 to September 5th, 2015. 

MEDA builds human dignity through entrepreneurship

Source: "MEDA builds human dignity through entrepreneurship" by Evelyn Rempel Petkau for the Canadian Mennonite
 
More than 500 Christian business­-men and women from a half-doz­en countries converged at the corner of Portage and Main in Winnipeg for four days in early November. There, in the shadow of the new Canadian Museum for Human Rights, participants attending the Mennonite Economic Development Associates (MEDA) annual convention learned about human rights and "human dignity through entrepreneurship."

While human rights have always been a core value of MEDA, "every conven­tion sets the bar a little higher," said Allan Sauder, president, adding, "This theme hit a chord with so many people. Human rights is always a factor in choosing and shaping sustainable programs that will have meaningful impact at a personal level, often for women, youth and those disadvantaged in their societies."

Plenary speakers included Art DeFehr, chief executive officer of Palliser Furniture, and Stephanie Stobbe, who came to Canada as a refugee from Laos when she was seven years old and is now associ­ate professor in conflict resolution stud­ies at Menno Simons College, Winnipeg. Together, they offered "a business case for human rights."

After carefully examining such questions as, "Does practising human rights lead to success in business?" and, "Are human rights consistent with biblical teachings?" they offered no black and white conclu­sions, but determined there is still lots of work to be done. People need to focus on issues close to home, where they can ac­tually do something, they said.

Ziauddin Yousafzai signs bookOn Nov. 7, participants were treated to a visit to the Canadian Museum for Human Rights, where two exhibits were opened for them. In this setting, Ziauddin Yousafzai spoke about human dignity for children and women. The educator, human rights campaigner, social activist and father of Nobel Peace Prize-winner Malala, said that, although the Taliban stirred up fear and violence in Pakistan, he, at great personal risk, peacefully resisted the Taliban's efforts to shut down schools and kept his own school open. He also inspired Malala to stand up for the right of all children to an education. Following the attack in which Malala was shot in the face while riding a school bus, Yousafzai didn't chose hatred or revenge, but forgiveness, for the attackers.

He shared stories of how, in his own country where 57 million children are out of school and many work in sweatshops, entrepreneurship can be a vehicle through which the dignity of women, children and men can be restored.

His own entrepreneurship is one such story. He said he wanted to be a teacher, but was unable to get a teaching job, so "in 1994, with three students, I and my friend started our own school. Today, we have more than 1,000 students."

"In many societies, women are ignored, treated as property, abused and some­times even killed in the name of honour. Attitudes can change through education," he said. "My five sisters could not go to school. I wanted my school to be different. I wanted to change the attitude of men to their sisters and mothers."

On Nov. 8, Laura Ling, award-winning journalist and author, told her story of being arrested and held captive in North Korea for 140 days in 2009. She was reporting on the trafficking of North Korean women at the time of her arrest. She said that this "darkest period of my life" taught her how to hold on to hope. "Seeing each day as a precious treasure, an opportu­nity to make a difference," she said she would treat her guards with compassion and grace. She believes this "practice of intentional gratitude" gave her the hope she needed and can also empower her to continue to be a voice for human dignity.

Jim Miller, president of JMX Brands, which is recognized as one of the top 1,000 Internet retailers in the U.S., used the story of the woman who anointed Jesus' feet with costly perfume as an example of giving. "Gifts bring depth to the relation­ship, but the power of the gift is unleashed only if it is shared for the good of the whole community," he said, adding, "Gift giving and receiving is at the very heart of God's story. Our faith compels us to share with those around us and we are inspired to work harder for the good of others."

Trudy Dueck, a businesswoman from Arborg, Man., was grateful to attend the convention. "Often you feel there is no place for business in the church," she said. "Here it is great to be amongst like-minded people and to have the recognition that business too can be a calling." 

Biking across Canada to support women

Source: "Biking across Canada to support women" by Barry Bergen for the Canadian Mennonite

Two young Canadian women, Mary Fehr and Sarah French plan to spend the summer riding their bikes across the country to raise funds for the Mennonite Economic Development Associates (MEDA) Greater Rural Opportunities for Women (GROW) project in Ghana. The two spent more than six months as MEDA interns, Fehr in Tanzania, and French in Nicaragua.

After a year of planning, the 8,710-kilometre ride from Victoria, B.C. to St. John's, Nfld. begins this month. "Neither of us are bikers," Fehr says with a smile, "so we are learning some things about it this year." They hope to average about a hundred kilometres per day and without a support vehicle. Their budget of $8,000 each – which they worked to save this past year – includes ferry fees, the occasional night in a motel and plane tickets from St. John's to Waterloo, Ont., at the conclusion of the summer.

They plan to stop at every MEDA chapter along the way, challenging each chapter to raise $10,000. They also hope to share stories about the GROW program and personal reflections on their time as interns. They hope to inspire a new generation of young adults to become involved in development issues. MEDA's GROW project helps rural women in Ghana to grow soybeans. Through the formation of co-operatives, rural women negotiate a better price in the market.

When Fehr and French finish their summer ride for GROW, they both hope to find work in the field of international development. 

Grebel students win 2014 MEDA Business Case Competition

Source: "Grebel students win 2014 MEDA Business Case Competition" by Fred Martin for the Canadian Mennonite

In only its second year of competition, a Conrad Grebel University College student team won the Business Case Competition at the annual Mennonite Economic Development Associates (MEDA) conven­tion, held this year in Winnipeg on Nov. 8.

The team, headed up by fourth-year student Jono Cullar, an international development major, beat out five teams from other Mennonite colleges and universities from across North America.

"Our team was well round­ed in our academic pro­grams," said Jono. "Not only did we have students in busi­ness and arts, but peace and conflict studies, accounting, and environment and business."

This was a broader skill set than other teams, compris­ing primarily business students.

This year's case competition was an actual MEDA project called Greater Rural Opportunities for Women (GROW) in Ghana that is working to empower women in soybean production. With a month to prepare, each team was asked to provide analysis and recommendations on MEDA's partnership with five local non-governmental organizations.

In its presentation, the Grebel team told a story through the voice of an entrepreneurial Ghanaian woman to make it personal.

"But we also backed the presentation with a lot of research," said Jono.

"I'm so proud of these students," remarked Grebel president Susan Schultz Huxman, who watched the uni­versity teams compete. "The competition is a wonderful way to expose students to the good work of MEDA. The foursome really articulated a smart, inspiring plan to help make the world a better place!"

Expenses for the team's registration and travel were supported by the Waterloo MEDA chapter, a donation from Murray and Yvonne Martin, and donations to the annual Grebel Fund.

Grebel's winning Business Case Competition team induded,from left to right: Elliot Parke, Anneke Pries­ Klassen, Jono Cullar and Sarah Steiner. 

How Canada can regain its prestige as a foreign aid leader

Source: "How Canada can regain its prestige as a foreign aid leader" by Tim Jackson for the Embassy

Impact investing links public, private money for the public good.

Sir Ronald Cohen MaRS photoThe argument that Canada is a declining power on the world stage is a familiar refrain within government circles. The absorption of the Canadian International Development Agency into Foreign Affairs and the sale of official residences abroad have critics arguing whether Canada has lost its prestige as a country that once led international development initiatives.

This week, Sir Ronald Cohen, considered the father of British venture capital, travelled to Canada with a solution that could boost Canada's status as a leader in international aid. Canadian governments and institutions, he suggested, should engage in a new form of global philanthropy: impact investing.

Sir Ronald is a co-founder of Apax Partners, a venture fund with US$37.4 billion of assets under management as of March 31. As chair of the G8 Social Impact Investment Taskforce, he wants to mobilize private capital for the public good—and he thinks Canada has a global role to play as a marketplace and broker for new financial vehicles.

"Government is not in the best position to innovate because their whole value proposition is not to fail," he told a select group of Canadians this week.

But investors, especially those of the millennial generation, are not only risk-takers, they seek meaning in their work. And social impact investing is the ultimate pay-it-forward model of investment.

So what is impact investing, and how can it replace or supplement traditional international development? Micro-financing loans are the most traditional form of impact investing. But they are blunt instruments. More sophisticated financial tools include social impact bonds, or SIBs, and social impact funds that invest in for-profit start-ups—just as a venture capital fund might—but target companies that have a social or environmental purpose.

SIBs are a financing vehicle for social programs that flip the traditional government "pay-for-service" structure on its head. With SIBs, investors pay upfront for a program (for example, poverty reduction in a particular region), and if the fund meets its objectives, the government pays back investors their capital plus rewards them with a rate-of-return that is comparable or higher than traditional government bonds.

SIBs typically give uncorrelated rates of return between four and nine per cent while at the same time generating social returns that save lives and government fees.

Sir Ronald wants Canada to step up to the SIB plate. In a private meeting with bankers and government officials in Toronto this week, he spelled out how the United Kingdom and Japan have created social impact funds by pooling unclaimed bank assets. Big Society Capital in the UK, for instance, now has 600 million pounds of assets under management thanks to government policy that enabled banks to release 400 million pounds in unclaimed assets to the fund, while the banks topped it up with an additional 200 pounds of their own money. Sir Ronald thinks Canada could also allocate unclaimed assets to impact investing, and the banks should invest alongside government.

Canada has been slow on creating SIBs, but we are ahead of the international field with other initiatives. Canada pioneered the Social Venture Connexion, or SVX, a platform that connects impact ventures with accredited investors.

INFRONT, a program designed by MaRS in collaboration with Sarona Asset Management and Mennonite Economic Development Associates, is an innovative global mentorship project that sends Canadian venture capitalists to emerging markets where they offer technical assistance and mentor overseas funds and ventures.

I've personally participated in the INFRONT program. Earlier this year, I flew to India to meet with Aavishkaar, a Mumbai-based social impact fund that invests in startups like Nepra, a waste management company. It has not only delivered financial returns for its investors, it is also an example of how social impact businesses can improve the quality of life for some of Ahmedabad's poorest workers: its waste pickers.

Aavishkaar is an international example of best practices in the social impact investing space. It succeeded in raising private capital to fund 38 portfolio companies in India.

My role was to share and exchange ideas based on the portfolio companies they've assembled, as well as discuss financing and partnerships with Aavishkaar's principals. I'm now using my networks in Canada to help Aavishkaar leverage more money from North American investors.

Canada has a major role to play in international development. But I believe that role has less to do with traditional government financing, and more to do with public-private partnerships—in this case governments working with social impact investors to fund projects based on outcomes.

Currently over $1 trillion of assets under management in Canada have been invested using some form of responsible investing criteria according to an RBC report using 2013 data. Imagine if more of those dollars were directed specifically to social impact projects both at home and abroad. Investor money would soon exceed government allocation.

To paraphrase Judith Rodin, president of the Rockefeller Foundation: there is not enough money in government coffers to adequately address poverty, homelessness and unemployment. But there is enough money in the world to tackle these issues. It's just locked up in private investments—and we now have the key to unlock it.

Tim Jackson is Canada's sector representative on the Social Impact Investment Taskforce, and lead executive at the MaRS Centre for Impact Investing.