MicroVest EDF Cayman Feeder

The MicroVest Enhanced Debt Fund is a private credit fund that invests in Responsible Financial Institutions that predominantly serve micro, small and medium enterprises (MSME) in frontier and emerging markets. The fund seeks to deliver positive absolute returns with low to negative correlation to broader market indices and employs a levered strategy. EDF ultimately connects global institutional investors with SMEs and entrepreneurs that can put loan proceeds to productive use but have historically lacked access to the formal financial sector. The typical end borrower seeks capital for productivity generating purposes, such as business expansion or asset acquisition.

The EDF structure facilitates the “crowding in” of capital to address the SME finance gap in developing countries by raising both Limited Partnership (LP) units and debt in the form of a Notes program. Through EDF’s use of leverage, LP unit holders can earn “market-rate” returns on a private debt product that makes two to three year-tenor, self-amortizing senior unsecured loans. At the same time, for each dollar of LP units raised from investors and invested in a microfinance institution, EDF will raise an additional four dollars in capital from debt providers like development finance institutions, insurance companies and socially responsible mutual funds. The Notes enable MicroVest to place additional lending capital with microfinance institutions that pass our underwriting and social impact scoring process, thereby serving more end borrowers whom experience has shown to be good credit risks. In addition, attracting new debt investors will encourage more qualified institutional debt investors to allocate capital towards the microfinance and SME lending spaces.