TBN National Conf. '11 - Mark Paper - Business Partners

BUSINESS PARTNERS THESIS To have a development impact (unleash entrepreneurs who pursue wealth for themselves and create jobs for many) … in the SME sector (bolstering the “middle class”, the fulcrum of successful democracies) AND To make profits (thus ensuring a sustainable and growing development impact)

Fact Sheet Business Partners is a leading specialised investment group providing debt and equity investment, mentorship and property management services for small and medium enterprises (SMEs) With initial establishment capital of US$ 20 million, the company has grown it’s total investment portfolio, through positive reinvestment activity and without further capital calls, to US$ 300 million, made up of over 3,200 active investments and now has a total net asset value of US$ 380 million. To date the company has made over 35,000 investments to the value of in excess of US$ 1 billion and has facilitated more than 500,000 employment opportunities. Target investment range is between US$50,000 and US$ 1 million

The Business Partners edge is driven by a number of key factors
30-year experience
Exclusive focus on family SMEs that make up majority of SMEs
Underserved segment by banks and PE funds
Focus on the SME segment Efficiency in process Flexible, tailored financing instruments Sector diversifi-cation Active value-adding Achieve scale of reach to SMEs Alignment of interests The Business Partners Edge
Suite of five innovative instruments
Offers flexible combination of secured, partially secured, cashflow, and equity financing
Self-liquidating structure and preferential cashflow rights mitigate risk
Deep sector-specific knowledge from 35,000+ transactions
Detailed understanding of key financial drivers for each sector
Lowers due diligence costs of cashflow-based financing
Active technical assistance at every stage of investment
Dedicated TA facility allocated as loans, not grants
Database of 400+ experienced Mentors
Investment strategy is locally deployed, centrally managed and supported
Local teams with strong local networks
Target 5-7 deals per investment officer per year
Proprietary systems and processes ensure quality control throughout
30-year experience
Exclusive focus on family SMEs that make up majority of SMEs in Southern Africa
Generate high-volume, high-quality deal flow Offer finance solutions matched to needs Benefit from diversification without high cost Boost returns and build long-term capacity Ensure superior, consistent execution Generate stable returns while building SME sectors

SME Focus (Lifestyle)

30-year experience
Target 7.2 deals per investment officer per year
30-year experience

Business Partners has developed proprietary processes and systems, certified to ISO standards for quality management In accordance with ISO 9001:2000 certification, we have developed a number of proprietary operating systems Our unique capabilities in credit risk analysis help streamline due diligence and minimize costs Database Risk analysis Due diligence Deal processing
System used to monitor activities from the pre-screening phase of a potential investment through the completion of due diligence
Output is recommendation for approval to the committee, rejection of business plan by BPI, or withdrawal by client
Addresses keys issues such as level of deal flow, turnaround times, source of deal flow, sector
Orion
Software used to provide investment officers with database and resources covering information on all investments made and profiles on sector specific industries, due diligence facilitators, due diligence resources, macroeconomic resources and reference guides
Expert Resource Center
System designed to assist the investment officers in compiling all terms/conditions relating to investment decision
Platform for automatic generation of legal documentation
Prise
Database of specialist technical assistance service providers
Mentor
Proprietary database of investment information accumulated over almost 30 years
Unparalleled sector-level insight
Focusing on most critical risks streamlines due diligence process
Due diligence costs are minimized
For most projects, an initial review is usually complete within 4 days
If a project proceeds to full due diligence, process takes 3-4 weeks
Loan and equity products are standardized as are legal documents, with very little need for costly customization or negotiation
Sector-specific knowledge enables focus on most critical credit issues
Efficient assessment of key credit risks