Deetken Impact: Canadian Impact Investing Leader Profile

This profile is a part of a series to showcase Canadian impact investing leaders during SOCAP20 Virtual. Our aim is to build the profile of Canadian funds and the impact investing market amongst our colleagues in the US and around the world. The series is presented by SVX with the support of the Consulate General of Canada in San Francisco and Silicon Valley.

Deetken Impact invests in emerging economies to generate long term returns while making a positive social and environmental impact in communities. Together with its affiliate, Deetken Impact Sustainable Energy, Deetken Impact manages over C $120MM in impact assets, primarily in Latin America and the Caribbean.

Location: Offices in Vancouver Canada, San José Costa Rica and Lima Peru

Fund Target Size: US$35MM / C$47MM

Sustainable Development Goal (SDG) Focus

  • Goal 5: Gender Equality
  • Goal 3: Good Health and Well-being
  • Goal 8: Decent Work and Economic Growth

Company Purpose

Deetken has a track record of delivering strong, stable returns to investors for over 10 years by investing in businesses that make a meaningful contribution to the Sustainable Development Goals.

Deetken Impact launched the Ilu Women’s Empowerment Fund in 2016, and three years later formed a partnership with Pro Mujer, a Latin American women’s development organization, to collaboratively manage the fund as a joint venture and deepen its emphasis on gender. The target fund size is US $35MM, with US $27 million already committed and US $22 million deployed. After successfully closing the first fundraising round from catalytic investors, including DFC (formerly OPIC), Canadian foundations and credit unions, Deetken Impact and Pro Mujer are planning a second round to raise another US $10 million.

Target Beneficiary

The Ilu Women Empowerment Fund’s investment strategy places strong emphasis on women’s economic empowerment and entrepreneurship. The Ilu Fund makes senior and subordinated debt investments in Latin America and the Caribbean with a focus on transactions in the US $1 to $3 million range. It invests in a diversified portfolio of high impact businesses that promote women in leadership and governance, products and services that meet the needs of women and girls, gender-sensitive value chains and equity.

Portfolio investments include financial institutions that provide integrated and thoughtfully designed services for low-income women, including access to healthcare, educational loans, financial services, and technical assistance, as well as gender-smart investments in renewable energy, affordable housing and social enterprise.

Recent Milestones

Ilu Fund Milestones include:

  1. DFC Financing. Deetken Impact raised $10MM of senior debt financing for the Ilu Women’s Empowerment Fund from the United States International Development Finance Corporation (formerly OPIC)
  2. Private Sector Financing. Deetken Impact has raised the balance of the Ilu Fund’s capital from a diverse set of over 70 private sector investors including foundations, family offices, credit unions and individuals. Deetken Impact places emphasis on bringing women investors into the fund, as women typically make up a small proportion of investors in private market securities like the Ilu Fund. Among our individual investors, over 40% are women
  3. Gender Smart Investment Management. Deetken Impact is implementing gender smart practices across its investment management and governance functions. The Ilu Fund has completed Gender Smart Scorecards for 13 portfolio companies and 7 pipeline companies. Scorecard data is collected through a structured interview process with senior leadership of each portfolio company, included in investment recommendations and used to identify areas of strength and weakness in a company’s business practices. This helps the Ilu Fund’s Gender Smart Investment Committee to work with portfolio companies to understand and shape gender-smart business objectives.

Impact

The Ilu Fund reports on impact on a quarterly basis to its investors. Here are some of the key indicators tracked:

COVID-19

Latin America is currently the epicentre of the COVID-19 global health pandemic, but Ilu Fund portfolio companies and their clients have shown impressive resilience in challenging circumstances. Of the Fund’s 17 current portfolio companies, one has required restructuring of the terms of its investment and the remainder have continued to perform as originally planned. Deetken Impact continues to closely monitor and support the Fund’s portfolio companies as the crisis evolves.

Portfolio Examples

Pro Mujer
Pro Mujer is a leading women’s development organization serving 300,000 women across 6 countries in Latin America. They have disbursed $3.6 billion in small loans since 1990. With three decades of experience serving women entrepreneurs, Pro Mujer provides an integrated set of services to help underserved women to reach their full potential including financial products, primary and preventative health care services, and business education. Pro Mujer continues to pilot new service delivery and technologies to efficiently reach more vulnerable populations, including apps to help women access health care and counselling services for gender based violence.

FINCA Haiti
FINCA Haiti SA is a microfinance institution serving 45,000 customers, 85% of whom are women, across 8 branches. Finca Haiti not only reaches out to unbanked women clients but is also building up a staff and senior management team that is mostly women.

In 2017, FINCA Haiti SA entered into a CAD 7 million partnership with Global Affairs Canada to scale up financial inclusion efforts, targeting low-income Haitian women in particular, leading to improved living conditions, health and education. The Ilu Fund’s loan is an example of how ‘blended finance’ involving the public and private sector working together can be used to sustainably support the growth of impact businesses in frontier markets.

PISCIS
In addition to businesses supporting women entrepreneurs building small or micro businesses, we also support small and medium enterprises with women owners, management and staff.

PISCIS was founded in Peru in 1978 with trout processing factories in Quichuay (Huancayo) and in Characas (Puno). It began to export trout from Lake Titicaca in 1981, initially to Sweden and today to a variety of countries. The PISCIS sustainable trout farming business hires almost entirely women at their fish processing plant in southern Peru. The long textile tradition in southern Andean Peru has resulted in a local workforce that has a good skills match for work undertaken at the PISCIS factories.

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