Deetken Impact Bonds

Successfully Funded!

$611,000
14
investors
2017/10/19
date closed
Overview

Investment Highlights

Deetken Impact Bonds provide investors an opportunity to invest in businesses that promote entrepreneurship and improve access to basic services including clean renewable energy, healthcare and affordable housing.


  • We focus on Latin America and the Caribbean, where we have a strong pipeline of investment opportunities and deep partnership networks
  • We ensure meaningful social and environmental impact of our portfolio companies by conducting rigorous due diligence, regular monitoring and field visits, and providing technical advice/assistance
  • Our management team is based in Vancouver, BC, and Lima, Peru. We collectively have over 40 years of international impact investing experience and have deployed over $20M in the last decade
  • We have skin in the game. Our management team has invested over 25% of the capital in the portfolio
  • Investors earn 6% simple interest distributed annually, are RRSP/TFSA eligible. Principal is returned at the end of the 5-year term


Many of us are looking for sound investments. But few find opportunities that truly make a difference, both to our portfolios and to the communities in which we invest.

Deetken Asset Management’s mission is to offer Canadian investors both. 

We have spent the better part of a decade uncovering unique investment opportunities that provide competitive financial returns while delivering social and environmental change for local communities in Latin America and Caribbean.

We invest in sustainable operating businesses that:

  • promote entrepreneurship,
  • improve access to basic needs like financial services, health care, education, affordable housing and
  • drive energy and climate sustainability.


Was working as a delivery person at low income before Acceso lent him $10,000 for a motorcycle CNG fueled taxi based on his expected future income.

Mr. David Eleazar Saravia
Condori
Lima, Peru


Leased machinery and a vehicle for his poultry farm under an innovative microleasing program from Microfin.


Mr. Heller Lutzon
Montevideo, Uruguay


Started a business selling beauty products. Received medical treatment for cervical disease as well as asthma treatment for her husband and son.

Mrs. Vilma Linares
Manchego
Moquegua, Peru



Over an 8-year period from 2008 to 2016, Deetken's team invested over C$10 million in impactful Latin American  businesses and generated an average annual return of 10% for investors

Deetken is a registered fund manager with the BC Securities Commission.  Deetken is also a certified B Corp. We are proud to join a growing community of over 2,100 Certified B Corps from 50 countries who have voluntarily chosen to conduct business in a way that creates value for all stakeholders, not just shareholders.


Product

Deetken Impact Bonds are backed by a diversified portfolio of investments in high impact businesses - businesses that deliver financial, social and/or environmental returns.

This portfolio is managed by Deetken Asset Management and has deployed ~$7M (including ~$2M from Impact Bonds) since inception.  In addition, Deetken’s management team have made significant personal capital contributions, representing >25% of the portfolio's current assets.

We prioritize achieving market-based risk-adjusted returns and capital preservation as fundamental to any investment opportunity. Just as important, investments must also meet a high standard of delivering sustainable social and/or environmental impact.

Our investments come from a range of sectors, including:

Renewable Energy
Clean energy – solar, hydro, wind - projects that can meet the growing need for energy in emerging markets and displace ‘dirty’ energy sources like bunker fuel.

View case study here


Financial Services
Financial institutions that provide microloans, micro-insurance, and savings products to the under-banked populations.  These financial services enable clients to invest, save and protect their family’s future.

View case study here

 

Healthcare Services
Organizations that provide basic but necessary health care to  low income communities.  Services include preventative diagnostics/screenings, health education, treatment, and prescription medications.

View case study here


Finding opportunities that meet this cross-section of objectives is difficult; however, we have built trusted partnerships in the region over the last decade that provide us with unique access to like-minded entrepreneurs and institutions.   

We invest in businesses that have a long history of success that allow us to examine the business opportunity and management team with a level of confidence.  This is supplemented by a rigorous and hands-on due diligence to strategically make our investment decisions.

Deetken manages the risks of our investments by

  • applying disciplined diversification across countries and sectors,
  • hedging currency exposure and
  • securing our investment against tangible assets

Finally, we structure our investments almost entirely as senior or subordinated loans, which provides more predictable cash flow, security and liquidity. 

Deetken Impact Bonds pay 6% simple interest distributed annually, are RRSP/TFSA eligible, and principal is returned at the 5-year maturity. Our investors believe Deetken Impact Bonds are an attractive investment for Canadians looking to use their investment dollars as a catalyst for transformational change in underserved communities.

 

Impact 

Deetken supports the UN’s 2030 Agenda for Sustainable Development and Sustainable Development Goals.  Specifically, we evaluate our investment opportunities and our portfolio companies against their contribution to these goals.  Deetken’s current portfolio of holdings have delivered the following impact against the UN Sustainability Goals.



Goal: Ensure healthy lives and promote well-being for all at all ages
2,900 clients have received health care services in the past 12 months



Goal: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
13,300 MSME clients have received financial or literacy training in the last 12 months



Goal: Ensure access to affordable, reliable, sustainable and modern energy for all
144 GWh per year of clean energy generated, enough to power 5,300 households
50,000 tons of GHGs displaced, equivalent to taking almost 15,000 cars off the road
Lower Prices for consumers with sales price less than 50% of prevailing market rate



Goal: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
104,595 clients - 85% female and 37% rural
795 full-time jobs - 67% female
$1,900 average loan size
$675 micro/small enterprise; $4,900 medium enterprise




 Use of Proceeds

100 % of the proceeds from this offering will be used to make impact investments.

Deetken Impact Fund equity investors (those who have previously invested) pay for any fees/costs associated with the fund raise


Investing Rewards

Your investment in Deetken Impact Bonds is a catalyst for entrepreneurs and communities in Latin America and Carribbean.

For investments exceeding $20,000, investors will receive a fantastic basket of goods produced by the enterprising clients of Deetken's portfolio companies.


Investor Taxation Benefits

This investment is RRSP/TFSA/LIRA eligible.  The investor will need to open a Self-administered Registered Account with a Trust Company. Investors may be charged additional fees by the Trust company.

Meet the Team
André Powell
Chief Executive Officer
Jose Lamyin
Chief Investment Officer
Alexa Blain
Chief Operating Officer
Samir Shah
Chief Financial Officer
German Matzumura
Regional Director
Mauricio Gamboa
Business Development Manager
Carl Black
Investment Analyst
Updates

Deetken

May 05, 2017

Deetken joins the B Corp Movement

At Deetken Asset Management, we are committed to identifying and supporting companies that generate sustainable returns while making a meaningful, positive contribution to their communities. Pursuing more than one “bottom line” is core to our business model and our investment philosophy.

That’s why we decided to become a Certified B Corporation.

Certified B Corporations are a new type of company which use the power of business to solve social and environmental problems. B Corp is to business what Fair Trade certification is to coffee or USDA Organic certification to milk.

We are proud to join a growing community of over 2,100 Certified B Corps from 50 countries who have voluntarily chosen to conduct business in a way that creates value for all stakeholders, not just shareholders. In Canada, Certified B Corps include a diverse range of businesses from coffee roasters and sustainable food providers to major banks and media companies.

To become a Certified B Corporation, Deetken Asset Management participated in a rigorous evaluation process. Because most business decisions have the potential for positive impact, our operations were assessed from end to end, from our governance framework to the way we treat our workers to our environmental impact. We achieved a particularly high score on our practice of investing in businesses which have a proven and deliberate strategy to benefit the communities in which they operate, by promoting entrepreneurship or increasing access to renewable energy, affordable housing or education.

“The B Corp movement is a tremendous force for changing the way that the world does business,” said Alexa Blain, Chief Operating Officer of Deetken Asset Management. “The ultimate goal is to encourage companies to grow in a way that creates shared and durable prosperity for all. It’s a natural fit for Deetken to join this collective movement. The assessment process provided us with a new lens on our business, and we look forward to continuing to drive best practices alongside this global community of like-minded companies.”


For more information on B Corporations, visit www.bcorporation.net.

For more information on Deetken Asset Management, visit www.deetken.com.


Deetken

April 19, 2017

Reflections on Pro Mujer in Argentina

*Pro Mujer client posing in her storefront (Argentina). Image courtesy of Pro Mujer.


Fostering Successful Entrepreneurship among Women through Lending, Training, and Health Promotion

At Deetken Asset Management Inc. (DAMI) we are committed to achieving double (and in some cases triple) bottom line results - delivering strong and stable returns to our investors through investments that have a positive social and environmental impact. Our partners at Pro Mujer share this mission. With over 25 years of micro-lending in five countries (Peru, Bolivia, Nicaragua, Mexico, and Argentina), Pro Mujer is one of Latin America’s leading developmental organizations focused exclusively on women clients. Deetken has been providing much needed capital and technical assistance to support Pro Mujer’s lending activities for over six years, and we consider Pro Mujer International (based in New York City) a strategic partner.



Each of Pro Mujer’s operations faces its own opportunities and challenges. Argentina’s underserved northern region is no exception, where people face poverty, experience poor health outcomes and have little access to financial opportunities.  The economic depression in the early 2000’s resulted in the closing of many banks and increased unemployment and poverty throughout the country. Since then, Argentina’s economy has been slowly recovering, but the impact is still being felt in the country’s poorest regions. Although the economy has been improving since 2003, it is still difficult for banks and microfinance institutions to borrow capital, which in turn creates strict lending requirements.

There are few microfinance institutions like Pro Mujer in Argentina. Most financial institutions are unwilling to provide loans to those with low incomes, the so-called bottom of the pyramid. There are several reasons for this:

  • The country has high inflation caused by interest rates, a result of a previously closed economy and a history of protectionist policies. This means that outside capital was, and still is, hard to come by. The limited capital and high interest rates heavily contribute to the lack of microfinance organizations.
  • Many of the poor work in the informal sector and are unable to provide physical evidence of their income to qualify for loans. Those who do have the proper documentation typically do not require a large enough loan to meet the minimum requirement for established banks.
  • Unlike Canada, loan interest from an independent financial entity in Argentina is subject to a 21% value-added tax. Rate subsidies and tax deductions are only available to businesses in the formal economy, making it expensive for business in the informal economy to get a loan. For a business to transition from the informal to formal economy, they are subject to a 35% business income tax and immediate retroactive taxes and penalties. This is a deterrent that prevents most informal entrepreneurs from transitioning out of the informal economy.

These dynamics make it very difficult, if not impossible, for many families to escape the poverty trap. This is where Pro Mujer comes in. By providing access to affordable loans for low-income women entrepreneurs, the organization is serving a segment of the population that would otherwise have a very hard time accessing credit. In addition to capital, Pro Mujer offers a comprehensive program focused on helping aspiring women entrepreneurs to build their capacity as business owners while also enabling access for themselves and their families to health care and educational training.

In order to receive a loan through Pro Mujer, women are required to attend training in business management, life-skills, and health care. Health care training includes educational classes on preventative care and nutrition. This approach is not only altruistic: it is good business.  Pro Mujer’s involvement goes beyond the exchange of a loan.  By promoting health, business, and personal competence, Pro Mujer creates the foundation for the success of its clients. The results have shown that this approach works: default rates for loans are extremely low and currently stand at less than 0.5%.



Pro Mujer in Argentina administers the majority of their loans using a group structure that resembles a small corporation. This method has proved to be very beneficial for both Pro Mujer and its clients.

Group Lending

Pro Mujer takes an active role in each investment. One method they have found particularly effective is “group lending.” For a majority of the loans administered in Argentina, the recipients are required to have a working management structure where women are responsible for both their personal success and the success of the group. The management structures reinforce accountability, leadership, risk management, and focused responsibilities.


A lending group consists of four small groups with two representatives in each group: a group leader (la "Jefa del Grupo") and support member. The support member is appointed to the main group and given one of four roles: president, cashier, secretary, or health promoter.

The group is required to attend reoccurring sessions that consist of a meeting, educational training, hands on training, and loan disbursements. A Pro Mujer advisor supervises the sessions, providing assistance when needed.

Meeting

During the meeting, the group handles all processes, roles, and responsibilities in accordance with the group management structure. Any outstanding issues or concerns are addressed and managed with the guidance of the Pro Mujer advisor, if necessary. Typically, the atmosphere of the meeting is positive and each woman is encouraged to contribute. The group members rotate through the four roles: president, cashier, secretary, and health promoter, providing each woman with a range of experience in leadership and communication. Members of the group receive regular evaluations of their performance in each role, which increases confidence and helps Pro Mujer’s clients to become more invested in the performance of their group.

Training

The lending meeting is then followed by an hour of mandatory training, including a 20-minute microteaching session. This training enhances the professional and personal growth of each group member. Pro Mujer believes that the educational and hands-on training provides the women they serve with the tools to develop as successful business women. Training topics range from business planning and budgeting to empowerment and confidence building. Women learn to develop “Living Plans” which help them adapt to the stresses and complications of raising a family while operating a household and a business.

Health

Argentina provides free public health care, but care is difficult to access outside of an emergency and typically involves long wait times. In addition, preventative care is virtually non-existent despite the high incidences of preventable diseases in women, such as diabetes, obesity, and cervical cancer.

Pro Mujer provides all members and their families with access to life-saving primary health care. This component is important as it provides security to families, alleviating the stress of worrying about their family's health care and allowing Pro Mujer members to focus on building their businesses.

Pro Mujer’s health care program offers a variety of services, including:

  • Preventative and immediate health care, including health screening with a nurse and follow-up with an onsite doctor
  • Life and incapacity insurance to protect members and their families in the event of a critical illness
  • Health and lifestyle educational training, including on topics such as nutrition and exercise

These services are conveniently offered at Pro Mujer Service Centers, which minimizes the time entrepreneurs are away from business activities. Pro Mujer charges a small service fee to all clients. For many of the women served by Pro Mujer, the health care dimension is one of the biggest draws to the organization.

Looking Forward

The Argentinian government has begun to make changes to meet their goal to improve the economy and reduce the impact of high inflation. In addition, the government realizes the benefit (e.g. generating tax revenue) of easing the transition from the informal to formal economy.  Pro Mujer in Argentina sees this as an opportunity to collaborate with the government and other organizations to help their members take their businesses to the next level.

Despite the challenges of operating in a complex context, clients of Pro Mujer in Argentina are building businesses and successfully managing their loans. The program is enriching their lives, allowing them to feel empowered, to provide for their families, to contribute to their communities and to set a powerful example for the next generation of business owners.  We are proud that the partnership between Pro Mujer and DAMI is contributing to these important outcomes. 

Deetken

March 17, 2017

Fundación Covelo and DAMI: Making a Difference in Central America

On October 28th 1998, Hurricane Mitch struck Honduras and caused the worst flooding the country has experienced in close to 100 years.  In addition to claiming thousands of lives and destroying an estimated 35,000 homes, Mitch decimated one of the main markets in Tegucigalpa, the country’s capital.

In the aftermath of the disaster, most lending institutions were reluctant to provide credit to businesses that relied on a market that had been destroyed. How would these businesses repay loans, they asked, without a market to sell their products?  Without these loans, people would not be able to restart their businesses, making the impact of the hurricane even more devastating.

Fortunately, one organization was willing to provide this much needed credit. This was Fundación Covelo (“Covelo”), a pioneer of microfinance in Central America.

Today, Covelo functions as a second level institution and facilitates US$ 31.7 Million in loans to 40 microfinance institutions, which in turn serve close to 300,000 clients in rural Honduras, Nicaragua, Guatemala and El Salvador. Covelo’s support targets low-income, mostly rural households. More than 53% of Covelo’s clients are women.

Covelo has had a catalytic impact on the microfinance sector in Honduras.

The foundation has supported the drafting and approval of regulatory laws for the sector and promoted a new field of study at the national university focused on building a technical career in microfinance.

Through its MFI clients, Covelo provides or supports a range of services that have a social and/or environmental impact. These include, among other areas of focus, providing credit to micro, small and medium enterprises, including rural businesses; supporting social housing; and offering micro-insurance.

In addition, Covelo is one of the few providers of student loans. It has not only promoted the creation of a specialized institution dedicated to educational loans but has also contributed its own funds to the project, targeting young students in Honduras in need of financial support in order to finish their studies and/or to progress to a higher or more specialized level of studies. Covelo has lent to approximately 800 low income students who have demonstrated high academic achievement.

Covelo is also committed to the generation of clean energy to serve the needs of non-electrified rural homes. An estimated 1.5 million people, approximately 30% of the rural population in Honduras, do not have access to the national electrical grid. The “Sol y Luz” (“Sun and Light”) project enables households to borrow US $ 1,000 to purchase a solar panel to generate electricity.  To date, Sol y Luz has provided electricity to over 750 families in Honduras and Nicaragua. This has allowed these families to extend their study or chore hours. It has also increased their access to radio and television as well as enabled them to charge cell phones and other electronic devices.  In short, Sol y Luz has helped increase productivity and made an enormous contribution to improving the quality of life for its beneficiaries. (Learn more about the Sol y Luz project by watching this video.)

At DAMI, we are very pleased to be in negotiations, together with Inter-American Development Bank, to provide subordinated loans to Covelo. Our contribution will help the Covelo team support the 40 microfinance institutions who with whom they work.

Learn more about Covelo by clicking here.

Deetken

February 21, 2017

Video: Strategic Partnerships: DAMI and ABACO



Deetken Asset Management Inc. (DAMI) and ABACO have been working together since 2008, co-investing in Microfinance and MSMEs opportunities and also working together in technical assistance projects funded by international development banks - IDB, CAF, etc. Learn more by watching this video.

Deetken

February 21, 2017

Video: Strategic Partnerships: DAMI and Oikocredit


Deekten Asset Management Inc. (DAMI) and Oikocredit share a common mission to provide financial and technical support to organizations in developing economies, promote a healthy impact investor eco-system in Canada and provide investor choice to Canadian investors. Learn more by watching this video.


Deetken

May 31, 2016

Deetken Impact Fund Closes

Deetken Asset Management Inc. is pleased to announce the first close of the Deetken Impact Fund (or “DIF”) -- - one of Canada’s first registered international impact investment funds.

DIF aims to deliver strong, consistent returns by investing in exceptional businesses that promote entrepreneurship and improve access to basic services, including clean renewable energy, healthcare and affordable housing.

It has a clear double/triple-bottom line mandate: to have a measurable positive social and/or environmental impact in the communities where it operates as well as yield market-based returns.

The Fund’s geographic focus is Latin America and the Caribbean, where Deetken Asset Management has a strong pipeline of investment opportunities in sustainable mid-sized projects and businesses.

“These mid-sized business, which are financially stable and often fall below the radar for larger funds, have a strong demand for capital combined with a need for customized technical assistance,” said José Lamyin, Chief Investment Officer. “We strongly believe that by investing in and collaborating with these businesses, we are helping to create new opportunities for growth and development in their communities.”

Alexa Blain, Chief Operating Officer, added: “We are tremendously excited to be offering Canadian and international investors the opportunity to invest in a truly unique portfolio of double or triple-bottom line investments. It’s an important step in our commitment to creating high quality impact investment products that are accessible to both large and small investors.”

DIF is domiciled in Canada and managed by Deetken Asset Management Inc., a registered Investment Fund Manager, Portfolio Manager and Exempt Market Dealer with the BC and Alberta Securities Commissions.

Deetken Asset Management Inc. is a joint venture between The Deetken Group, a Vancouver–based asset management and business advisory firm, and Cooperativa Abaco, Peru’s largest credit union. Together, these founding partners bring decades of experience in impact investments across Latin America and North America.

Investors
14 total, 12 anonymous
Roger Hardy
PHYLLIS LORRAINE Reilander
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