Building up Oikocredit’s equity portfolio
In August 2015, Oikocredit welcomed a new member to the management team, Bart van Eyk. As the equity and business development director, Bart is responsible for building-up and managing the equity team and portfolio from the Oikocredit International office in Amersfoort, the Netherlands. With a background in banking, microfinance, business innovation and structured finance in emerging markets, Bart brings the experience needed to grow Oikocredit’s equity portfolio as well as the know-how for further establishing a culture of innovation. Now, having been with Oikocredit for a few months, we spoke with Bart about what the equity team will focus on and why equity investments and business development are important for Oikocredit.
Why are equity investments important for Oikocredit and its development portfolio?
“We need to find new ways of investing that meet the financial needs of our clients as well as our own social, financial and environmental criteria. Equity investments are a good way to build our portfolio, while continuing to have an impact in low-income countries. Taking equity stakes in companies benefits our partners, as it provides growth capital by strengthening their capital base. We can also provide further value by having seats on boards, which involves working closely with management and the board to take the company to the next level. This also allows Oikocredit to support its partners in meeting and improving upon their social goals and missions.”
For the business development side of your role, what will that entail?
“After starting at Oikocredit, I asked people the question: what do we want to do with business development and what do we want to be? I discovered that there is wide support for bringing back the pioneering spirit of the early days. At the same time, we need to make sure that Oikocredit adapts to the current market conditions which put pressure on margins and financial sustainability. The business development side of my role includes looking at new and replicable ways of investing, which basically means looking at new products, sectors and markets that we’re not already active in. We are also looking for new partnerships and opportunities in different markets where we can make a difference and generate triple bottom line returns. An example of this could be water and sanitation, where there is a lot of innovation happening, albeit quite experimental and small scale.”
With a bigger team, what will equity’s growth targets be for the coming years?
“Our equity portfolio is currently around € 65 million which we would like to grow to € 200 million by 2020. We will do this by increasing our focus and efficiency as well as strengthening the global equity team with new team members who will be based in our regional offices. These team members will be professionals who know their own markets, speak the local language and have existing networks. They will work closely with their credit colleagues and help us in sourcing new deals and also finding new trends as well as markets that we are not already active in.”
How will your team source new deals and what will you look for?
“We’ll source new deals through our own networks. Oikocredit is a unique organization with offices in more than 30 countries, which provides us with great opportunities for sourcing new deals. Our team will also be active in getting the Oikocredit name out there more, so that co-investors and potential partners also know where to find us. We’re currently looking for growth stage investments of between € 2 million and € 10 million, primarily in agriculture, financial inclusion and related industries.”
Oikocredit’s 2016-2020 equity strategy is currently being finalised.