Transformational SME
Firm Headquarters: Toronto, Canada
Date Founded: 2001
This Page was Updated October 2020
Investment Approach
Our vision is to see Christian entrepreneurs and business managers grow honoring companies in the economically and spiritually neediest countries of North Africa, the Middle East and Asia.
Our mission is to support these Christian leaders in achieving the following outcomes:
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Goods and services that add transformational value and quality to peoples’ lives will be produced;
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Financially healthy businesses will be established, growing on a foundation of responsible loan and equity financing, in which loans are repaid with interest and a return on equity is delivered;
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A professional business culture that operates on ethical principles shaped by a Judeo-Christian worldview will be demonstrated;
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Jobs with dignity will be created and training opportunities provided;
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A generous-hearted, relevant and positive spiritual impact bringing blessing to the local community will be consistently pursued through careful planning and execution, and will be increasingly discernible over time.
Our strategy is to capitalize small-medium enterprises (SMEs) in North Africa, the Middle East and Asia by integrating financial, intellectual and human resources with real, growing business ventures.
Our vision is from Micah 6.8 in which a world of justice, kindness and humility in our walk with God is visible. Business will be truly transformational in operation and impact, as a tool in God’s hands for the nations to be drawn into a knowledge and embrace of the Lordship of Jesus Christ. On the journey to the fulfillment of this vision, we will see capital justly deployed especially where it is needed most, jobs with dignity created and other acts of mercy and kindness demonstrated through business, and a humble reliance upon God as our provider speaking into our decisions as faith-driven, steward-investors.
Focused Geographic Regions of Investment:
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Is all of your activity in the US? None.
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What countries outside of the US are you active in?
The majority of all countries across North Africa, the Middle East, West Asia, Central Asia, South Asia, Southeast Asia, North/Northeast Asia. Details provided upon request.
Focused Industries of Investment:
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Data, Software and Technology
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Education
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Healthcare
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Manufacturing
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Media, Publishing and Entertainment
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Agricultural
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Banking and Finance
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Construction and Engineering
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Consumer Retail
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Consumer Services
Previous or Active Portfolio Companies:
Since inception to end-June 2020 the Fund has deployed approx. $13.5M into 125 investments in 60 companies in 20 countries across the region, ranging from $25K to $600K per investment. Currently 27 active portfolio companies in 17 countries.
Investment Example:
EJ, a juice and jam manufacturing business in North Asia was introduced, in late 2013, to one of our team members by a strategic mission partner working in the region. The entrepreneur, a national who had come to Christ a few years earlier, requested a small investment of $25K to help purchase fruit for the year’s planned production, harvested in the western reaches of the country by local, isolated, poor and persecuted Christians he was encouraging. Per standard practice, we conducted an onsite due diligence exercise. Sales at this time were approx. $300K pa with sustained profitability in the 10% range. EJ had 12 employees. Following a positive Investment Committee review and assignment of a mentor, we made the investment. It was repaid in full in 10 months.
This first investment was immediately followed by a request for $50K for a growing amount of needed inventory for this effective business. This 2nd loan was repaid in 11 months. During the following year, although we had no financial investment in the business, we maintained mentoring contact with the entrepreneur who was able to finance his own growth in the 3rd year from internal cash.
A year later (2017), the entrepreneur returned with a request for $100K for inventory and $300K for the construction of a new factory to meet growing demand and opportunity. Our investment represented about half the total capital requirement, with internal EJ resources financing the rest. A year later (2018) we provided an additional $200K for a new product equipment line. These current loans are well on their way to being retired, without a payment ever having been missed.
2019 sales were $1.7M with a 19% net profit margin. EJ is now the 2nd largest producer in the country (up from 5th in 2013) and the only one which uses domestic fruit. It is now ISO certified to sell internationally which is its next growth phase objective. 2020 sales will likely breach $2M.
EJ employs approx. 40 in a country with widespread unemployment. Some employees have come to faith in Christ. Company prayer and optional Bible Study is made available. Local Christians, spread across the country have had economic, social and spiritual uplift through their engagement with EJ. EJ has built meeting places for them with a goal of 1 per year. EJ has helped send missionaries to Afghanistan. The entrepreneur spends considerable time training other entrepreneurs and encouraging them in their business. His testimony locally and across the country is known and solid.
Capital Raise Strategy
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Total Assets Under Management: $7.5M at 30 June 2020
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Total Number of Investors: 249
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Investments to Date: 50-100 by individual company count; 100-250 including repeat rounds
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Average Investment Size: $35K per investor
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Minimum Amount: $5K in order to enable participation in the Fund to be accessible to Christians from less-affluent countries and facilitate their participation in the global movement.
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of Capital from Top 3 Investors: Less than 25% (17%)
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Financial Reporting Frequency to Investors: Semi-Annual Reports
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Setup to accept charitable capital through the National Christian Foundation or other listing platforms?
Yes. Our goal is to raise an additional $5m over the next 3 years to enable new investment targets of $1.5 – $2M pa.
Leadership Team
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Cumulative Leadership Experience in Accredited Investing: 50+ years
Due to the security sensitivities of the countries in which we invest, this information cannot be made public, but is certainly provided upon request and in our Investor Information Memorandum. Leadership comes from multiple countries, with decades of in-depth experience in a wide range of business disciplines including entrepreneurship, finance, governance, human resources, marketing & sales, and strategy. Our leadership team specializes in cross-cultural integration of spiritual impact planning with viable commercial enterprise as a unique feature of our operation and value-add to the movement.
Spiritual Integration and Impact:
Faith Driven Investing can span a wide range from high yield to concessionary returns that have a higher level of spiritual integration. Having clear expectations of this philosophy is key for the movement. Each investment is unique and you might want to select multiples but if you had to choose one quadrant that best fits your groups spiritual integration and financial performance targets … What would it be?
All investments are based upon an integration of quadruple bottom line outcomes (economic, environmental, social and spiritual). The spiritual integration of all aspects of the business internally, from a Judeo-Christian worldview is essential, and without this evident driver, the Fund does not invest. Financially, the Fund endeavors to return to investors, on an annual basis, a portion of their capital invested in the Fund, with a view to full return of principal over a period of 7 – 10 years, without guarantee. All investors, as a global community, waive any personal financial gain, while all net profit earned by the Fund is used as a reserve against losses and/or distributed regionally to charitable activities advancing the Kingdom. Hence the “concessionary financial return” with high spiritual integration portion of the matrix is appropriate.
Describe the Spiritual Integration Activities of the Fund:
First, our conviction is that every element of the business operation from goods and services selection, to supply chain, production, marketing, sales, HR, financial practices, general administration and governance is a tangible opportunity and context for spiritual integration. E.g. when a Muslim Finance Manager asks why we pay our taxes in a corrupt and dysfunctional environment where virtually no-one does, this is a great opportunity for real-time, real-context integration of spiritual truth with business activity. Second, we believe disciple-making is possible from the moment we meet and/or begin to work with a client, employee or vendor – and indeed, this subversive activity can precede any apparent “evangelism” activity. As time passes, and the question regarding the reason for the hope within us is asked, we may see a more explicit response to the message of the gospel. Third, we understand that we are part of an eco-system of Kingdom participants who each have a role to play in the formation of societal-impact, Kingdom-demonstrating, proclaiming and extending manifestations of the body of Christ. We seek to integrate our activities with those of other players in the region. Fourth, we realize that people have involvements in other spheres of life, in their families, neighborhoods, etc. Impact in these areas through participation in events, celebrations, community service and genuine relationships throughout these extended networks furthers the spiritual reach of the business. Fifth, we are convinced that good, relevant theological foundations and missiological best practices are essential for wholistic impact and we strive to grow in all these areas.
Each and every business we invest in presents us with both a commercial business plan and a spiritual impact plan. We do not prescribe or manage either of these but evaluate what the potential investee states as their integrated goals, advise in relevant areas, and assess how we can best be of service. This is essentially our due diligence stage. Post-investment we assign mentor(s) to the investee company and they track on an ongoing basis, intentionally and comprehensively, how the business is getting on in both commercial and spiritual ways. Our mentoring input is crucial to our integration plan. Globally we focus a lot of effort on both training, and prayer, realizing that we are always learning, and that unless God shows up, we are toast!
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Finally, reporting to our investors regularly is the final aspect of our intentional spiritual integration. Understanding the dynamics of each context is a challenge and educational opportunity in its own right, and one which enables our investors to feel a part of what is happening beyond a passive investment only. Approximately 15% of our investors engage as volunteers in one way or another, with perhaps 30 – 40% of our investors attending our annual general meeting and training meetings, from all parts of the globe.
Is Impact and Spiritual Integration Tracked?
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Absolutely. The primary means is via our mentoring program associated with each investee company and its senior, committed Christian leadership. Management invests heavily in training both internally and externally with business leaders. Regular reporting from mentors on each company is provided to management and is a key feature of management accountability to the Board and global investor community. Due to the security sensitivity of our work, Reports and Examples are available upon request.
Are you partnered with any other organizations?
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Yes, absolutely. We value supply-chain collaboration in accomplishing together what we cannot accomplish on our own. We are deeply linked with a portfolio of “strategic mission partners” comprised of sending agencies, churches, and various service organizations with specialist offerings (e.g. DAF organizations, other impact funds, etc.)
A lot of Investing Conversations look at Social Impact related to the United Nations Sustainable Development Goals. Is there one of these that most resonates with your organization?
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The Fund would resonate most with decent work and economic growth, believing a job with dignity is crucial to so many other worthy goals. The whole world wants a job and the structural deficit in jobs is a critical factor in war, trafficking, and other forms of exploitation. The creation of jobs leads to creation of wealth which is the pre cursor to any distribution of wealth and the strengthening of public institutions. Finally, the workplace represents perhaps the single most critical environment in which life-on-life influence for Christ can be authentically modeled and articulated.
WHY The FAITH DRIVEN INVESTOR?
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Why are you compelled to be certified and a part of the Faith Driven Investor Group?
We believe Jesus is moving on the hearts of His people to engage in faith-driven investing as a reflection of their obedience as stewards of what He owns and has entrusted to them to manage in His Name and for the extension of His Kingdom. We believe that the Fund can bring real value in terms of vision, experience and opportunity to this community of steward-investors. Our desire is to build the global community associated with this movement, to serve the least-reached, and to mobilise treasure, talent and time to this end, for His greater glory among the nations.
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Does the leadership align with the Unifying Principles on Faith Driven Investor and agree to the Code of Conduct? Yes.
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Who nominated you to be listed on the FDI site? Henry Kaestner
AFFILIATIONS- Are you a part of any third party groups, affiliations that you would like to list here?
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Impact Foundation and BAM Global would be two of the most important.
Learn More
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