DEG invests in Brazilian impact fund

• Fund "FIRST" raises USD 66m for small and medium-sized enterprises in Brazil in the first closing
• DEG investment amounting to USD 12.5m
• Fund target commitment size up to USD 125m

The Brazilian fund "Fundo de Investimentos Riqueza Social para Todos (FIRST)" is launched with an innovative concept: It invests in small and medium-sized enterprises (SME) that target low-income households. The investment of DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, in FIRST amounts to USD 12.5m. Further investors are the International Finance Corporation (IFC), the French development finance institution PROPARCO, and Omidyar Network, established by eBay founder Pierre Omidyar. 66m US-dollars have already been raised by the end of the first subscription period. FIRST seeks to raise a total of USD 125m.

FIRST is a GIIRS ("Global Impact Investing Rating System") rated fund and has achieved a "Certified B-Corps" status, a certification granted by the US foundation B-Lab. This status is considered to be one of the most rigorous standards for corporate responsibility worldwide. In addition, FIRST signed the UN Principles for Responsible Investment (PRI) which aim at protection of the environment, compliance with social standards and sound corporate governance.

The Fund will invest in high-growth small and medium-sized companies in Brazil, with a focus on companies that deliver innovative products and services to low-income households that live on USD 10 to 30 per day. Emphasis is also laid on companies that are committed to environmentally friendly production methods and climate protection. Target sectors are the consumer goods and food industry and housing. In regional terms, the Fund intends to focus on economic promotion of the less developed regions such as the Amazon and Northeast regions of Brazil.

In its role as anchor investor in FIRST, DEG strengthens the capital base of the Fund and sends a positive signal to potential investors. Especially small and medium-sized family businesses, which have difficulties raising equity capital, are benefiting from this.

In addition to SME financings, equity commitments are one of DEG's strategic aims. Last year alone, DEG committed a total of EUR 572m in form of equity participations and quasi-equity loans. These strengthen the companies' equity base, thus giving them more scope for loan financings in order to make investments.