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Christian Garms - IAPB Eye Funds - MS PowerPoint

Christian Garms - IAPB Eye Funds - MS PowerPoint






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  • ORAL OVERVIEW Social Venture Debt Fund Totaling $50 M Eye Fund I: $20 M Eye Fund II: $30 M (expected) Unprecedented Partnership: 1. International Association for the Prevention of Blindness 2. Ashoka: Innovators for the Public 3. Deutsche Bank Currently Seeking Financing for Eye Fund I: PRI $7.5 M Market-Rate Investors $12.5 M Total $20 M Grants $1.75 M Three Driving Forces Objectives The Eye Fund (I and II) Eye Fund I Structural Overview Details and Terms Eye Fund II Highlights Major Milestones To-Date Eight Benefits for Google.Org Mitigating Risks Implementation Timeline Partners and Leadership Team Leveraging Existing Sustainability and Financial Models to systemically change….nonprofits, and social investing
  • Asad: DB (7pm) Susanne: Why important to IAPB (5 min) Rosa: Greater implications for Ashoka SFS (5 min)

Christian Garms - IAPB Eye Funds - MS PowerPoint Christian Garms - IAPB Eye Funds - MS PowerPoint Presentation Transcript

  • The Eye Fund Presented To: WCRE 2007
  • Global Blindness and Economic Gain
    • “ Without extra interventions, the global number of blind individuals would increase from 37M in the year 2000 to 76M in 2020.
    • A successful VISION 2020 initiative would result in only 24M blind in 2020 and lead to 429M blind person-years avoided.
    • A conservative estimate of the economic gain is $102B”.
    • The Magnitude and Cost of Global Blindness: An Increasing Problem That Can Be Alleviated , Kevin Frick PhD, Allen Foster, FRCS, FRCO
  • Eye Fund Overview
    • A social venture fund combining innovative financing with sustainability planning and training resulting in sustainable high quality eye services for all economic strata, rich and poor alike.
    • Addresses two primary constraints: capacity building and financing
    • Will deliver financial and social returns
    • Social objective: reduce blindness and ameliorate visual disability in equitable fashion
    • Three components:
      • Eye Fund 1
      • Eye Fund 2
      • IAPB Capacity Building Grant Fund
  • Debt as an Engine for Growth for Eye Hospitals
    • Debt financing diversifies the number of funding channels available to eye care programs
    • Debt facilitates the integration of financial institutions, socially-motivated investors, and the social sector
    • Debt can help Eye Hospitals leverage resources, achieve economies of scale, and increase the number of poor people served
    • Debt opens new channels for funding through large commercial companies related to eye care and socially motivated investors
    • Grant capital used as a catalyst can leverage investments from socially motivated investors at reasonable terms.
    • Increased freedom and financial flexibility to plan, grow, and allocate unrestricted grants
  • Three Forces Driving This Opportunity
    • Globally there are approximately 37 million blind, and 150 million with serious visual impairment
    • Grant financing not commensurate with need: collective annual spending roughly $250 million; growth is slow
    1. Global Demand for Affordable, High-Quality Eye Care 2. Proven Sustainable and Profitable Service Delivery Model
    • Proven methodology & planning approach for creating sustainable eye care programs in variety of countries
    • Approximately 250 sustainable eye care programs have been created
    • Self-financing, servicing all economic strata, emphasizing the poor
    • Sustainable eye care with positive cash flow can service debt financing utilized to scale operations
    3. Creating Competitive Landscape for Social Investing
    • Leveraging existing financial models and capital markets
    • Create a “synapse” to connect financial institutions, socially investors, and social sector
    • Recent success in microfinance facilitates next-generation social investments
  • Collaborative Partnership
    • Deutsche Bank
      • Leading global financial institution, positioned on the forefront of social investing with the dual objective of profitability and social return
      • Manages over $425 MM of socially motivated financing, with loans to and investments in more than 110 organizations in over 30 countries
    • International Agency for the Prevention of Blindness
      • Coordinating, umbrella organization leading an international effort to mobilize resources for blindness prevention activities.
      • Network of professional bodies, non-governmental organisations (NGOs), educational institutions and interested individuals with the focus to develop and implement programs for the prevention of blindness.
    • Ashoka: Innovators for the Public
      • The global association of the world’s leading social entrepreneurs
      • Over 1800 fellows in more than 60 countries
      • Eye Fund initiator and provider of financial and human resources via grant from Robert Wood Johnson Foundation
  • Structural Overview
    • Oversight Structure
    • Deutsche Bank Advisory and Investment Committees of financial industry and charity experts
    • IAPB Capacity Building Grant Committee
    • Uses of Financing:
    • Capital investments for equipment or buildings
    • Program expansion
    • Bridge Financing
    • Replication of program in new region
    PRI/Social Investors (1% Return) Subordinated Debt $7.4 MM Socially Motivated Commercial Investors (5.8% Return) Senior Debt $12.6 MM Eye Fund I $20 MM Capital Structure :
  • Major Milestones To-Date
    • Established partnership among three leading entities (MOU)
    • 2006 Clinton Global Initiative Commitment
    • Identified investment of 11 loan candidates
      • Presently loan applications are being received and reviewed
    • Financial model developed
    • Lavelle Fund has committed $250,000 to IAPB capacity building grant fund; another $200,000 is pending from a private donor
    • Oversight committees are being established:
      • Deutsche Bank Investment Advisory Committee
      • IAPB Capacity Building Grant Committee
    • Online survey for Eye Fund II candidate screening methodology approaching official launch
  • Eye Fund I Potential Loan Recipients
    • Sankara Nethralaya (Chennai, India)
    • He Eye Hospital (Shenyang, China)
    • Chitagong eye hospital (Dhaka, Bangladesh)
    • Shroff Charity Eye Hospital (New Delhi, India)
    • Grameen Bank (Dhaka, Bangladesh)
    • Al Noor Foundation/Magrabi (Cairo, Egypt)
    • LV Prasad (India)
    • Fundacion Vision (Paraguay)
    • Eye Foundation Hospital (Nigeria)
    • ICEE- International Center for Eye Care Education (S Africa &
    • Australia Sydney)
    • Operation Eyesight Universal (Calgary, Canada)
  • Details and Terms: Eye Fund I & II * 11 organizations are in final stage of completing the Eye Fund application, $34 M total are in demand, some attrition is expected. case-by-case basis Case-by-case basis Collateral Requirement TBD Up to 7 years Duration of Loan TBD Full at maturity Principal Payment 50 K - $15 M $250 K - $10 M Borrowing Value / Entity TBD LIBOR + 50 basis points (Roughly 6%) Borrowers’ Interest Rate TBD 11 Organizations* Number Borrowers TBD TBD 5.8% 1%
    • Financial Return
      • Market-Rate Investors
      • PRI Investors
    $30 M (expected) $20 M Fund Size (USD) Eye Fund II Eye Fund I
  • Capacity Building Grant Fund
    • Matching grant fund for
      • Grants to loan investments for training to boost volume, quality and sustainability
      • Support to strengthen capacity building training institutions
      • Grants to programs not ready for debt financing
        • Help programs become candidates for loan financing by making them self financing from user fees
        • Grants for training, research, programs in demographically challenged where self financing is not an option
    • Lavelle contribution of $250,000
    • Grow to $2M
  • Role of IAPB
    • Utilize network to discover, aggregate and pre-qualify an investing pool
    • Advisory Group to give guidance to Deutsche Bank for vetting and monitoring of investments
    • Capacity Building Committee as decision-maker regarding dispensing capacity building grants to loan fund investments and others
  • Role of IAPB Capacity Building Grant Committee
    • Create grant making criteria
    • Review and select grant recipients
    • Coordinate with Deutsche Bank, IAPB membership, investments and capacity building organizations.
    • Monitor results of capacity building grants, via it’s network of members and associated capacity building organizations
  • Role of Deutsche Bank Advisory Group
    • Interact with fund manager (Deutsche Bank) to provide advice on:
      • Vetting investments
      • Monitoring investments
      • Organizing technical assistance, training and business planning for investments
    • Liaise with IAPB capacity building grant committee
    • Members will have broad knowledge of eye care field and understand principles leading to sustainable, high quality, high volume eye care development
  • Implementation and Timeline: 2007 Survey Beta Test (EFII) EYE FUND I CLOSE Finalize Prospectus Raise $7.4 MM PRI Raise $1.75 MM Grants JAN APR MAY FEB JUNE MAR JULY AUG SEPT Official Survey Launch / Screen EFII Investments Establish Advisory & Grant Committees Raise $12.6 MM Commercial Investments
  • Thank You: Q&A Christian Garms Christian. Garms @ cbm -i.org +49 (6)251 2153 David Green [email_address] +1 (443) 253-7821
  • Summary of Eye Fund I Pipeline
    • Sankara Nethralaya
    • (Chennai, India)
    • He Eye Hospital
    • (Shenyang, China)
    • Chittagong Eye Hospital
    • (Dhaka, Bangladesh)
    • Shroff Charity Eye Hospital
    • (New Delhi, India)
    • Grameen Bank
    • (Dhaka, Bangladesh)
    • Al Noor Foundation/ Magrabi
    • Eye Hospital
    • (Cairo, Egypt)
    • Fundacion Vision
    • (Paraguay)
    • Eye Foundation Hospital
    • (Nigeria)
    • ICEE- International Center
    • for Eye Care Education
    • (Australia & South Africa)
    • Operation Eyesight Universal
    • (Calgary, Canada)
    • Loan volume: $2.7 M
    • Investment to be used to build research institute and increase direct service delivery
    • Total number of patients treated in 2006 was 421,226. 36% of total surgeries were provided to poor patients for free.
    • Loan volume: $3 M
    • Investment is to be used to quadruple the number of surgeries performed
    • Total number of patients treated in 2006 was 104,002. 11,698 patients received free/below cost outpatient service in 2006, which is 22% of the total outpatient service provided that year. 3,466 poor patients received free/below cost surgeries in 2006, which is 42% of total surgeries provided that year.
    • Loan volume: $6 M
    • Investment goods to be financed: full-service general hospital with sub-specialties including ophthalmology.
    • Chittagong is largest eye hospital in Bangladesh, providing a high percentage of surgery at no charge
    • Loan volume: $0.25 M
    • Investment is to be used for the hospital’s rural expansion and training
    • More than 50% of patients receive free care and surgery
    • Loan volume: $1 M
    • Investment to be financed: establishment of 5 eye hospitals in Bangladesh which will be self financing while providing a high degree of service to lower income people at no charge or below cost
    • Loan volume: $5 M
    • Investment goods to be financed: New building for low pay/free section; re-financing debt
    • Total of patients treated was 43,068 in 2005. Of 6000 surgeries, 57% were performed free of fees
    • Loan volume: $0.25 M
    • Investment is to be used to construct a teaching institute building
    • More than 50% of surgery provided at no charge to the patient
    • Loan volume: $5 M
    • Investment is used to refinance debt
    • Total number of patients treated was 189,050 in 2006. 58% of its services were provided to poor non-paying patients
    • Loan volume: $3 M
    • Investment goods to be financed: distribution of spectacles, franchising optical shops, focused on Africa
    • Loan volume: $1.5 M
    • Investment is to be used for sustainability planning, training, and building clinics. This is the leading agency for international eye care in Canada.
    Note: All 11 applicants have 3 year financial statements available, audited by eternal financial auditors.
  • Eye Fund II Highlights
    • Eye Fund II to commence once Eye Fund 1 is certain
    • Broader scope to include smaller investments (below $250,000)
    • Enable new financial intermediaries (IAPB and it’s larger members) to aggregate smaller financing needs
    • Online survey tool combined with business algorithms to identify, segment and pre-qualify potential investments (Database of 12,000+ eye care providers)
    • Online education and tools for sustainable organizational development and financing
    • Possibility of government and development agencies for guarantees
  • Changing the Competitive Landscape
    • IAPB to “own” investing pool backed by government guarantees.
    • This enables IAPB to put its investing pool out for competitive bid. Financial institutions will compete to be the fund manager for this pool of investment because:
      • IAPB will have reduced the cost of due diligence by aggregating and pre-qualifying a sizable investing pool attractive to financial institutions
      • Secured government guarantees which will enable fund managers to more easily sell a fund with a higher credit rating