UPDATE: VMIL, Actus to raise US$100m for smallbiz fund
VM Investments Limited, VMIL, has partnered with London-based Actus Partners, Actus, to form a private equity fund that aims to raise up to US$100 million – which translates to more than $15 billion in local currency – for investment in Caribbean companies.
The fund called the Jamaica Actus Small and Medium Enterprise Fund 1 or JASMEF 1 will support at least 15 small businesses by providing access to equity or debt investments between US$500,000 and US$5 million.
“This fund is important for the space, because SMEs have always been crying out about the lack of funding. That they cannot get equity capital, and that they cannot access debt at reasonable rates,” Rezworth Burchenson, CEO of VM Investments Limited, said in an interview with Financial Gleaner. He said that the fund will aid in solving that problem.
The initial fund stands at over US$15 million, with VM Investments committing US$10 million of that amount. The state-owned Development Bank of Jamaica, DBJ, in partnership with the World Bank, will provide some US$5.5 million of which US$500,000 will go towards technical assistance. Murat Tasçı and Zhan Li from Actus will lead the fund manager team for JASMEF, and will seek out investors in the region rather than seed the fund with cash, said Burchenson.
“The [fund] will raise additional capital via large institutional fund managers for the final close. JASMEF is targeting a final fund size of US$100 million,” the partners said in a release.
JASMEF emerged originally as an initiative of the DBJ and the World Bank to get more funding for Caribbean businesses.
VMIL Actus Caribbean PE Limited will act as the management company for the fund. VM investments is taking a shareholding in this management company and will also have a representative on the fund’s committee to screen and assess investments in prospective small businesses.
VM Investments is a medium-sized investment firm that’s been aggressively growing its business in the past few years. As of March, the company, which trades on the Jamaica Stock Exchange, held capital of $3.7 billion and assets of $30 billion.
“We’re honoured to collaborate with the DBJ, VM Investments, and the World Bank to invest growth capital in Jamaican and other Caribbean SMEs. We’re excited about introducing our global networks to local SMEs to help them expand their reach across the wider Caribbean region, the Americas, Europe, MENA and beyond,” said Murat Tasçı, the founder of Actus Partners and the CEO and president of JASMEF said in the joint press release. MENA is the acronym for the Middle East and North Africa.
Actus was declared the sole winner in 2021 of a Development Bank of Jamaica DBJ/World Bank global selection process to identify managers for a private equity fund focused on supporting the development of Jamaican and Caribbean SMEs.
The selection was part of the Jamaica-World Bank Access to Finance project for SMEs and micro firms.
“Our team has a strong background in private equity as well as a keen focus on providing ESG, technical assistance, strategic foresight and other expertise to help SMEs not only achieve their growth goals but also enhance their impact on their business ecosystems and wider communities,” said Zhan Li, also of Actus Partners and a vice president of JASMEF.
The profile of companies considered ripe for JASMEF investment are those in operation for three years with 12 months of positive net income and operating cash flow. However, larger companies can also access funding, provided they are expanding into Jamaica and other Caribbean countries and partnering with SMEs.
The key sectors of focus are technology, climate and renewable energy, agriculture and food security, health and hygiene, tourism, logistics, light manufacturing, fast-moving consumer goods and business services.
The fund will also follow DBJ and World Bank requirements for economic social and governance metrics as well as the key objective of achieving measurable impact targets and alignment with appropriate United Nations Sustainable Development Goals, such as supporting decent work, economic growth, and gender equity.
Update: This story has been updated to correct the amount of investment to be made in each company.