OUR INVESTMENT PHILOSOPHY
We unlock capital to close gaps, investing in people and SMEs in underserved markets of Latin America and the Caribbean, activating and sustaining the high untapped economic, social and environmental potential with the aim of building a sustainable future based on inclusive and attractive economies.
EMERALD PEAK RECIPE
Diversify the Growth Capital Gap
Impact investing in Latin America saw over $600M flow to 619 deals between 2018-2019, 80% of which were majority debt financing. While credit in the name of impact is increasingly available, especially as COVID-19 relief funding has primarily been offered in the form of loans, sources of equity capital remain scarce.
By providing equity, quasi-equity & innovative deal structuring for Central American SMEs, Emerald Peak (EP) is addressing a critical market need.
Filling missing middles in the region
According to McKinsey, ALC lacks two middles: a lack of midsize businesses growing, competing, and creating higher-paying jobs, and a lack of a burgeoning middle class of consumers whose spending and saving could help boost domestic demand and investment in a sustainable way.
By investing in SMEs that create quality jobs, enterprises can project investment decisions, based on expected market growth, helping usher in a more sustained era of prosperity and dignity for a stagnant middle class.
Speeding Climate Smart Investments
Negative effects of climate change are felt strongly where extreme weather events are frequent. In Central America, hurricanes in 2021 impacted 9M people and accounted for $8.25B in economic damages. Changing climate continues to reduce agricultural yield in key regions and crops, turning smallholder farmers into economic refugees, reducing food and food security. Businesses that depend on water or other natural resources will face increasing scarcities and rising costs.
Supporting SMEs + Job Creation
SMEs account for 99.5% of all firms, 40% of the GDP and 60% of formal employment, however the LAC region lags in quality employment opportunities. During COVID-19 businesses lost significant revenue, which has created a shock in levels of formal employment. Without access to growth capital, many SMEs struggle to adapt to economic shocks via digital transition and business model pivots.
Inclusive recovery and economic growth will require impact-forward private capital. EP implements a buy & build strategy combined with a cross-border roll-up approach, and with larger combined enterprises, we expect to generate quality jobs, economies of scale and additional growth through entering new markets.
Prioritizing Gender Equality
UN Women estimates COVID-19 will leave 118M women in poverty across LAC, and female-owned businesses have been most affected during the pandemic. Additionally, women are more likely to be in low-skilled informal jobs in service sector jobs which are particularly vulnerable to economic shocks.
EP applies Gender Smart Investing as our strategic framework throughout our portfolio, with the aim of achieving gender parity in hiring and remuneration. Likewise, we foster technical and professional coaching to better prepare women for leadership roles, while supporting social initiatives to encourage grass-roots participation of women in the workforce.
In addition to firm level operational improvements, EP seeks to enhance climate resiliency across our portfolio through cross-cutting initiatives that will utilise technology to address critical systemic challenges related to climate change, such as water, renewables, food insecurity, natural disasters, and human health.