Investment strategy

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High social impact, stable returns

The Fund’s investment strategy focuses on creating significant social impact. LMDF invests in emerging microfinance institutions addressing the needs of some of the world’s most marginalized populations with a particular focus on women, youth and people living in rural areas.

The geographic focus is on the developing countries in Latin America, Africa and Asia.

A proven focus on debt instruments

LMDF finances a wide range of microfinance institutions, a majority of which are not-for-profit structures or cooperatives. Debt instruments are the instruments of choice to provide microfinance institutions with funding to expand their business models.

LMDF is an open-ended SICAV and its diversified portfolio of debt instruments creates the cash-flows required to balance the Fund’s assets and shareholder structure.

A solid risk management

LMDF investments in emerging microfinance institutions result in smaller tickets and a high degree of counterparty and country diversification in a small fund. LMDF may not invest more than 5% of its net assets in any single counterparty and concentration risks in any one country may not exceed 15%.

LMDF close collaboration with ADA, the investment advisor – ensures close and regular monitoring of investments on a quarterly basis and an annual site visit. Maintaining relationships has been key to achieving financial and social returns.

Stable returns

At the same time, the Fund generates stable returns above 3% for institutional investors. With six years of investment track record LMDF is delivering value to shareholders while maximizing its social impact.