INFRONT

INFRONT: IMPACT INVESTING IN FRONTIER MARKETS

2013 - 2017

Impact Investing in Frontier Markets (INFRONT) is an innovative public-private partnership between Sarona Asset Management, MaRS Centre for Impact Investing, and the Government of Canada for sustainable development in frontier and emerging markets.

Overview

INFRONT

INFRONT is working throughout Asia, Africa and Latin America to expand the ability of SMEs to access investment capital, adopt and implement enlightened business practices, and accurately measure social impact.

Goal

The goal of INFRONT is for women and men to access products and services delivered by more socially and environmentally responsive firms.

Reach

Through this project, 5,050,000 women and men will have access to products and services.

Context

Small and Medium Enterprises (SMEs) are recognized as key economic drivers in frontier and emerging economies. However, SMEs face significant constraints that need to be resolved if they are to more fully and progressively serve the needs of individuals and national economies.

Three challenges in particular are faced by MEDA’s INFRONT initiative:

  1. SMEs have difficulty accessing investment capital for growth;
  2. SMEs struggle to adopt and implement best business practices; and
  3. Meaningful measurement of social impact is complex and difficult.

Opportunity

Led by MEDA, and in partnership with Sarona Asset Management (Sarona) and the MaRS Centre for Impact Investing, the Impact Investing in Frontier Markets (INFRONT) set-up the Sarona Frontier Markets Fund 2 LP (SFMF) to invest in local funds for onward investment in SMEs that have potential for high development impact.

Strategy

MEDA, and in partnership with Sarona Asset Management and the MaRS Centre for Impact Investing, INFRONT is comprised of two key components:

  1. Investment: The Sarona Frontier Markets Fund 2 LP (SFMF 2 LP), a fund of $150 million, is investing in up to 18 local funds for onward investment in approximately 130 SMEs that have potential for high development impact. Investors include OPIC, MEDA, Sarona, and private investors, spurred by an innovative and catalytic $15 million contribution from Global Affairs Canada.
  2. Technical Assistance Facility. The technical assistance facility is made up of three components:
    1. Sustainability Innovation Grant Fund. This fund provides economic incentives for at least 30 SMEs to improve the sustainability of their operations, with a focus on environmental, social and governance (ESG) policies and practices.
    2. Global Fund Manager Mentorship Program. This program will match 20 experienced North America private equity managers as mentors with fund managers in frontier and emerging markets.
    3. Impact Measurement. Building on existing social performance platforms, MEDA is developing an Enhanced Monitoring and Evaluation System (EMES) to support more rigorous impact measurement.

Partners

Project undertaken with the financial support of the Global Affairs Canada, MaRS Centre for Impact Investing, and Sarona Asset Management.