Opportunities for Investors

Deutsche Bank creates social investment funds that bring together commercial, development, and philanthropic investors.  All of Deutsche Bank’s investors have both a social and financial return objective, and for this reason, Deutsche Bank offers a broad spectrum of investments that range from philanthropic to market rate returns.  Each of the investment opportunities below includes an important social return, generated by providing low-income populations with access to financial services, and thus helping to build better communities in developing countries around the world.

Typical Fund Structure and Commercial Investment Products

By bringing together differently motivated investments to a common platform, Deutsche Bank has succeeded at leveraging increased resources for the social sector and extending the impact of the MFI beneficiary borrowers. The investment opportunities cover three tranches of risk capital:

– Senior Notes
– Mezzanine Notes
– Junior Notes

The returns on these different investment products tend to be more commercial, while it is important to note that in some cases, investors have selected the junior positions at more moderate returns, so as to enhance the overall fund structure that might leverage unique senior investors or because the fund achieves other development objectives they value.

Philanthropic Fund Investment Products
In addition to the investments above, Deutsche Bank has mobilized philanthropic resources to create funds that help bring commercial approaches to funding young and emerging Microfinance institutions (MFIs).

Funds:

– The Deutsche Bank Microcredit Development Fund (DBMDF)
Start-Up Fund

Investment products:

These philanthropic funds rely on low-cost funding and grants to achieve their goal of targeting young and emerging MFIs:

PRIs or Philanthropic Investments:

Low financial return investments complemented by the funds’ targeted social returns, including targeting lesser-served markets.

Grants and donations:

DBMDF, the non-profit 501c3 entity that gave birth to Deutsche Bank’s microfinance activities and continues to focus on smaller loans in less developed and underserved markets, actively seeks philanthropic investments and accepts grants and donations.  Please contact asad.mahmood@db.com if you’d like to learn more.

Finally, it is worth highlighting the value of philanthropic funds like DBMDF, which provided critical funding for many young MFIs that have since developed into leading microfinance institutions.  Below are a few quotes from some of these managers, testifying to the importance of this critical initial funding from DBMDF:

South Pacific Business Development, Samoa

“It [DBMDF] helped us forge relations with Samoa’s two biggest banks (ANZ and Westpac), which have become critical financers of SPBD, and helped us to grow to become a profitable MFI.”

– Gregory Casagrande, President and Chairman

XAC Bank, Mongolia

“The 2002 DB loan was the Bank’s first [international debt] transaction and was a huge reputational step for XAC. The process involved in getting a guarantee from DB taught the team a great deal about how to deal with international banks.”

 – XAC CFO during the transaction

Investor Profiles:

Commercial Funds:

Accredited Investors

Accredited investors (those individual or entities with over USD1million of assets, and income exceeding USD200,000 for each of the last two years) can invest in DB’s commercial funds1.

Philanthropic Funds:

Individual investors (regardless of size), donors, PRIs, and accredited investors.

Investment Fund Opportunities: Summary Information

The table below provides a brief highlight of the funds’ and a picture of the alternatives for investment.

 

Funds Start-Up DBMDF Consortium I
Open/Closed Fund Open Open Closed
(5 years)
Legal Structure Delaware Delaware Cayman Islands
Minimum Investment Any size Any size $250,000
Investment Products Senior Debt Senior Debt
Guarantees
Senior Debt
Targeted Investors

Social and philanthropic
Investors (individuals,
foundations, development organizations)

Social and philanthropic
Investors (individuals,
foundations, development organizations)
Commercial and Social:
  • Accredited Investors
    (High Net Worth
    individuals or
    Institutional investors)
  • Social/philanthropic
    investors
Targeted Returns Low to moderate financial  Low to moderate financial Commercial mainly, with some moderate returns on
specific note tranches
Investment tenor 5-7 years 5-7 years Fund Closed
(was 5 years)
Funds DB MF Invest No.1 FINCA Consortium II
Open/Closed Fund Closed
(7 years)
Closed
(7 years)
Closed
(7 years)
Legal Structure Luxembourg Netherlands Netherlands
Minimum Investment Approx. $100,000 $100,000 Approx. $150,000
Investment Products Senior Debt
Junior Debt
Senior Debt
Mezzanine Debt
Junior Debt
Senior Debt
Junior Debt
Mezzanine Debt
Bridge Financing
Subordinated Debt
Targeted Investors Commercial and Social:
  • Accredited Investors
    (High Net Worth
    individuals or
    Institutional investors)
  • Social/philanthropic investors

Commercial and Social:

  • Accredited Investors
    (High Net Worth
    individuals or
    Institutional investors)
  • Social/philanthropic investors

Commercial and Social:

  • Accredited Investors
    (High Net Worth
    individuals or
    Institutional investors)
  • Social/philanthropic investors
Targeted Returns Commercial mainly, with
some moderate returns on
specific note tranches
Commercial mainly, with
some moderate returns on
specific note tranches
Commercial mainly, with
some moderate returns on
specific note tranches
Investment tenor

Fund Closed
(was 7.5 years)

Fund Closed
(7 years)
Fund Closed
(7 years)

 

1 For a more precise definition of Accredited Investor, please visit:
http://www.sec.gov/answers/accred.htm

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Last Update: December 30, 2013
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