For six years, International Finance Corporation (IFC), the investment arm of the World Bank, has held its annual SME Ventures Forum for emerging fund managers (GPs) it supports. This year, Capria was invited to help drive a more ambitious and interactive event than in previous years. The forum was hosted by Proparco, the development finance institution (DFI) of France, on March 15-16. The result was two remarkable days in Paris.
Global gathering of GPs
Day One brought together 18 fund management teams from South Africa, West Africa, the Middle East, South Asia, Central Asia, South Asia, Central America and South America. Half were members of the Capria Network and half were IFC investees. They engaged in lively discussions and workgroups that focused on defining the biggest common challenges facing GPs in emerging markets, including: streamlining the arduous, time-consuming of fundraising process with local and international LPs; building a strong portfolio with the best available deals in the face of protracted timelines to first close; managing complex operating expense discussions with LPs; and building value in portfolio companies from the initial investment through exit. First-time teams from new funds really benefited from the war stories and solutions from more experienced managers.
Taking their suits off
That evening, the GPs put on aprons and together, prepared a gourmet meal for the soon-to-arrive LPs at L’atelier des Chefs. Over 20 LPs – representing private foundations, fund-of-funds, family offices, and DFIs who invest in local funds in emerging markets – arrived later at the cooking workshop. They too took off their suits and ties, donned aprons and prepared dessert for both GPs and LPs. This turned out to be a great venue for everyone to interact over shared cooking, amazing cuisine and ample wine.
Simultaneous GP and LP tracks
On Day Two, the GPs discussed the lessons learnt from their best and worst investments, and started to hammer out potential solutions to their major challenges identified on the previous day. In a different room, the LPs, representing nearly $1 billion of annual investment in emerging market funds, discussed lessons learned from their best investments and narrowed down a short list of their own major challenges, based on a pre-event survey and a similar LP gathering in San Francisco in September, 2016.
GPs and LPs come together
At midday, the GPs and LPs came together to hear about the top 3 challenges of the GPs and the top 3 challenges of the LPs, and discussed ideas for addressing those problems. Mixed GP-LP collaborative groups were set up to hone in on potential solutions to these common challenges. Among the GP-LP collaborative opportunities identified were: 1) developing a pre-first close warehousing facility for GPs; 2) a LP/GP online discovery marketplace; and 3) a vehicle to strengthen sector specific incubators/accelerators to increase GP pipelines of quality, investible SMEs. We hope these working groups will continue to take these concepts forward, fostering in concrete collaborations to help effectively increase the velocity and quantum of investment to address the global missing middle.
In the afternoon, LPs migrated to different rooms to hear informal presentations and ask questions of the GPs in which they were most interested. The day ended with GPs and LPs coming together for wine and more conversation. The event laid the foundation for LPs and GPs to share a common space and helped make them aware of each other’s challenges, mutual goals and respective investment strategies and opportunities.
If you are an LP interested in this event and future events like it, please reach out to firstname.lastname@example.org.
If you are a GP in an emerging markets and want to learn more about Capria, please apply for our investment and partnership.