Sagicor Investments along with other large institutional investors such as the Development Bank of Jamaica (DBJ) have injected US$40 million into a private equity fund that has targeted 15 companies to invest in.
The goal is to increase the fund to US$100 million and expand the number of companies invested in. CEO of the Sagicor Group, Christopher Zacca unveiled the new asset class which he deemed “suitable for pension funds” at the launch of the Small Enterprise Assistance Funds (SEAF) Caribbean SME Growth Fund.
The launch was held at the Sagicor Auditorium in New Kingston was designed to sensitise the institutional investing public of the opportunity to be a part of the new asset class.
Bert van der Vaart, the co-founder, and CEO of SEAF explained the benefits of being in the fund.
“When we invest in a business, that business experiences a 15 percent rate of employment growth. There is a 30 percent rate of increased tax payments,” van der Vaart said.
“And in US dollar terms, there is a 20 percent revenue growth. We work to improve the lives of the communities we serve through an expansion of capital,” the SEAF CEO added.
The SEAF Caribbean SME Growth Fund is managed by SEAF which started life in 1989 as CARE Small Business Assistance Corporation (CARESBAC), a subsidiary of the international relief organization CARE, with the mission to invest in underserved markets and the intent to create sustainable employment growth by providing risk capital to small and medium-sized businesses.
Speaking at the event, Milverton Reynolds, head of the Development Bank of Jamaica shared that his organisation had invested in the fund and said that, “we have been in this asset class for a year and we are happy with the returns.”
Kevin Donaldson, head of Sagicor Investments noted that “This new product shows that we are about innovation in offering client options.”
This new product is a fund that directly invests in companies in an effort to bring higher returns to investors. Keynote speaker, Minister of Finance and the Public Service, Nigel Clarke explained, “This is a signature moment in Jamaica. This is a private equity fund set up in Jamaica with a market capitalisation of $40 million. They could go anywhere. And so, providing equity capital on a private basis this is the gap in the Jamaican capital market place.”
“While we applaud the Jamaica Stock Exchange (JSE) and their achievement of being the top stock exchange for the last few years, there is a space for companies who are not ready to go public but don’t want to take a bank loan. Companies that want their privacy, have proprietary technology that is being development or are at the growth stage may not want to become public. This is where the SEAF growth fund comes in. The time is ripe to invest in Jamaica.”
Retail investors can participate in the fund through Sagicor’s Sigma innovation fund.