The Eye Fund Presented To:  WCRE 2007
Global Blindness and Economic Gain  <ul><li>“ Without extra interventions, the global number of blind individuals would in...
 
Eye Fund Overview <ul><li>A social venture fund combining innovative financing with sustainability planning and training r...
Debt as an Engine for Growth for Eye Hospitals <ul><li>Debt financing diversifies the number of funding channels available...
Three Forces Driving This Opportunity <ul><li>Globally there are approximately 37 million blind, and 150 million with seri...
Collaborative Partnership <ul><li>Deutsche Bank  </li></ul><ul><ul><li>Leading global financial institution, positioned on...
 
Structural Overview <ul><li>Oversight Structure </li></ul><ul><li>Deutsche Bank Advisory and Investment Committees of fina...
Major Milestones To-Date <ul><li>Established partnership among three leading entities (MOU) </li></ul><ul><li>2006 Clinton...
Eye Fund I  Potential Loan Recipients   <ul><li>Sankara  Nethralaya  (Chennai, India) </li></ul><ul><li>He Eye Hospital  (...
Details and Terms: Eye Fund I & II   *  11 organizations are in final stage of completing the Eye Fund application, $34 M ...
Capacity Building Grant Fund <ul><li>Matching grant fund for  </li></ul><ul><ul><li>Grants to loan investments for trainin...
Role of IAPB <ul><li>Utilize network to discover, aggregate and pre-qualify an investing pool </li></ul><ul><li>Advisory G...
 
Role of IAPB Capacity Building Grant Committee <ul><li>Create grant making criteria </li></ul><ul><li>Review and select gr...
Role of Deutsche Bank Advisory Group <ul><li>Interact with fund manager (Deutsche Bank) to provide advice on: </li></ul><u...
Implementation and Timeline: 2007 Survey Beta Test (EFII) EYE FUND I CLOSE Finalize Prospectus Raise $7.4 MM PRI Raise $1....
 
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 <ul><li>Sankara Nethralaya </li></ul><ul><li>(Chennai, India) </li></ul><ul><li>He Eye Hosp...
Eye Fund II Highlights <ul><li>Eye Fund II to commence once Eye Fund 1 is certain </li></ul><ul><li>Broader scope to inclu...
Changing the Competitive Landscape <ul><li>IAPB to “own” investing pool backed by government guarantees.  </li></ul><ul><l...
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Christian Garms - IAPB Eye Funds - MS PowerPoint

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Christian Garms - IAPB Eye Funds - MS PowerPoint

  1. 1. The Eye Fund Presented To: WCRE 2007
  2. 2. Global Blindness and Economic Gain <ul><li>“ Without extra interventions, the global number of blind individuals would increase from 37M in the year 2000 to 76M in 2020. </li></ul><ul><li>A successful VISION 2020 initiative would result in only 24M blind in 2020 and lead to 429M blind person-years avoided. </li></ul><ul><li>A conservative estimate of the economic gain is $102B”. </li></ul><ul><li>The Magnitude and Cost of Global Blindness: An Increasing Problem That Can Be Alleviated , Kevin Frick PhD, Allen Foster, FRCS, FRCO </li></ul>
  3. 4. Eye Fund Overview <ul><li>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. </li></ul><ul><li>Addresses two primary constraints: capacity building and financing </li></ul><ul><li>Will deliver financial and social returns </li></ul><ul><li>Social objective: reduce blindness and ameliorate visual disability in equitable fashion </li></ul><ul><li>Three components: </li></ul><ul><ul><li>Eye Fund 1 </li></ul></ul><ul><ul><li>Eye Fund 2 </li></ul></ul><ul><ul><li>IAPB Capacity Building Grant Fund </li></ul></ul>
  4. 5. Debt as an Engine for Growth for Eye Hospitals <ul><li>Debt financing diversifies the number of funding channels available to eye care programs </li></ul><ul><li>Debt facilitates the integration of financial institutions, socially-motivated investors, and the social sector </li></ul><ul><li>Debt can help Eye Hospitals leverage resources, achieve economies of scale, and increase the number of poor people served </li></ul><ul><li>Debt opens new channels for funding through large commercial companies related to eye care and socially motivated investors </li></ul><ul><li>Grant capital used as a catalyst can leverage investments from socially motivated investors at reasonable terms. </li></ul><ul><li>Increased freedom and financial flexibility to plan, grow, and allocate unrestricted grants </li></ul>
  5. 6. Three Forces Driving This Opportunity <ul><li>Globally there are approximately 37 million blind, and 150 million with serious visual impairment </li></ul><ul><li>Grant financing not commensurate with need: collective annual spending roughly $250 million; growth is slow </li></ul>1. Global Demand for Affordable, High-Quality Eye Care 2. Proven Sustainable and Profitable Service Delivery Model <ul><li>Proven methodology & planning approach for creating sustainable eye care programs in variety of countries </li></ul><ul><li>Approximately 250 sustainable eye care programs have been created </li></ul><ul><li>Self-financing, servicing all economic strata, emphasizing the poor </li></ul><ul><li>Sustainable eye care with positive cash flow can service debt financing utilized to scale operations </li></ul>3. Creating Competitive Landscape for Social Investing <ul><li>Leveraging existing financial models and capital markets </li></ul><ul><li>Create a “synapse” to connect financial institutions, socially investors, and social sector </li></ul><ul><li>Recent success in microfinance facilitates next-generation social investments </li></ul>
  6. 7. Collaborative Partnership <ul><li>Deutsche Bank </li></ul><ul><ul><li>Leading global financial institution, positioned on the forefront of social investing with the dual objective of profitability and social return </li></ul></ul><ul><ul><li>Manages over $425 MM of socially motivated financing, with loans to and investments in more than 110 organizations in over 30 countries </li></ul></ul><ul><li>International Agency for the Prevention of Blindness </li></ul><ul><ul><li>Coordinating, umbrella organization leading an international effort to mobilize resources for blindness prevention activities. </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><li>Ashoka: Innovators for the Public </li></ul><ul><ul><li>The global association of the world’s leading social entrepreneurs </li></ul></ul><ul><ul><li>Over 1800 fellows in more than 60 countries </li></ul></ul><ul><ul><li>Eye Fund initiator and provider of financial and human resources via grant from Robert Wood Johnson Foundation </li></ul></ul>
  7. 9. Structural Overview <ul><li>Oversight Structure </li></ul><ul><li>Deutsche Bank Advisory and Investment Committees of financial industry and charity experts </li></ul><ul><li>IAPB Capacity Building Grant Committee </li></ul><ul><li>Uses of Financing: </li></ul><ul><li>Capital investments for equipment or buildings </li></ul><ul><li>Program expansion </li></ul><ul><li>Bridge Financing </li></ul><ul><li>Replication of program in new region </li></ul>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 :
  8. 10. Major Milestones To-Date <ul><li>Established partnership among three leading entities (MOU) </li></ul><ul><li>2006 Clinton Global Initiative Commitment </li></ul><ul><li>Identified investment of 11 loan candidates </li></ul><ul><ul><li>Presently loan applications are being received and reviewed </li></ul></ul><ul><li>Financial model developed </li></ul><ul><li>Lavelle Fund has committed $250,000 to IAPB capacity building grant fund; another $200,000 is pending from a private donor </li></ul><ul><li>Oversight committees are being established: </li></ul><ul><ul><li>Deutsche Bank Investment Advisory Committee </li></ul></ul><ul><ul><li>IAPB Capacity Building Grant Committee </li></ul></ul><ul><li>Online survey for Eye Fund II candidate screening methodology approaching official launch </li></ul>
  9. 11. Eye Fund I Potential Loan Recipients <ul><li>Sankara Nethralaya (Chennai, India) </li></ul><ul><li>He Eye Hospital (Shenyang, China) </li></ul><ul><li>Chitagong eye hospital (Dhaka, Bangladesh) </li></ul><ul><li>Shroff Charity Eye Hospital (New Delhi, India) </li></ul><ul><li>Grameen Bank (Dhaka, Bangladesh) </li></ul><ul><li>Al Noor Foundation/Magrabi (Cairo, Egypt) </li></ul><ul><li>LV Prasad (India) </li></ul><ul><li>Fundacion Vision (Paraguay) </li></ul><ul><li>Eye Foundation Hospital (Nigeria) </li></ul><ul><li>ICEE- International Center for Eye Care Education (S Africa & </li></ul><ul><li>Australia Sydney) </li></ul><ul><li>Operation Eyesight Universal (Calgary, Canada) </li></ul>
  10. 12. 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% <ul><li>Financial Return </li></ul><ul><ul><li>Market-Rate Investors </li></ul></ul><ul><ul><li>PRI Investors </li></ul></ul>$30 M (expected) $20 M Fund Size (USD) Eye Fund II Eye Fund I
  11. 13. Capacity Building Grant Fund <ul><li>Matching grant fund for </li></ul><ul><ul><li>Grants to loan investments for training to boost volume, quality and sustainability </li></ul></ul><ul><ul><li>Support to strengthen capacity building training institutions </li></ul></ul><ul><ul><li>Grants to programs not ready for debt financing </li></ul></ul><ul><ul><ul><li>Help programs become candidates for loan financing by making them self financing from user fees </li></ul></ul></ul><ul><ul><ul><li>Grants for training, research, programs in demographically challenged where self financing is not an option </li></ul></ul></ul><ul><li>Lavelle contribution of $250,000 </li></ul><ul><li>Grow to $2M </li></ul>
  12. 14. Role of IAPB <ul><li>Utilize network to discover, aggregate and pre-qualify an investing pool </li></ul><ul><li>Advisory Group to give guidance to Deutsche Bank for vetting and monitoring of investments </li></ul><ul><li>Capacity Building Committee as decision-maker regarding dispensing capacity building grants to loan fund investments and others </li></ul>
  13. 16. Role of IAPB Capacity Building Grant Committee <ul><li>Create grant making criteria </li></ul><ul><li>Review and select grant recipients </li></ul><ul><li>Coordinate with Deutsche Bank, IAPB membership, investments and capacity building organizations. </li></ul><ul><li>Monitor results of capacity building grants, via it’s network of members and associated capacity building organizations </li></ul>
  14. 17. Role of Deutsche Bank Advisory Group <ul><li>Interact with fund manager (Deutsche Bank) to provide advice on: </li></ul><ul><ul><li>Vetting investments </li></ul></ul><ul><ul><li>Monitoring investments </li></ul></ul><ul><ul><li>Organizing technical assistance, training and business planning for investments </li></ul></ul><ul><li>Liaise with IAPB capacity building grant committee </li></ul><ul><li>Members will have broad knowledge of eye care field and understand principles leading to sustainable, high quality, high volume eye care development </li></ul>
  15. 18. 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
  16. 20. Thank You: Q&A Christian Garms Christian. Garms @ cbm -i.org +49 (6)251 2153 David Green [email_address] +1 (443) 253-7821
  17. 22. Summary of Eye Fund I Pipeline <ul><li>Sankara Nethralaya </li></ul><ul><li>(Chennai, India) </li></ul><ul><li>He Eye Hospital </li></ul><ul><li>(Shenyang, China) </li></ul><ul><li>Chittagong Eye Hospital </li></ul><ul><li>(Dhaka, Bangladesh) </li></ul><ul><li>Shroff Charity Eye Hospital </li></ul><ul><li>(New Delhi, India) </li></ul><ul><li>Grameen Bank </li></ul><ul><li>(Dhaka, Bangladesh) </li></ul><ul><li>Al Noor Foundation/ Magrabi </li></ul><ul><li>Eye Hospital </li></ul><ul><li>(Cairo, Egypt) </li></ul><ul><li>Fundacion Vision </li></ul><ul><li>(Paraguay) </li></ul><ul><li>Eye Foundation Hospital </li></ul><ul><li>(Nigeria) </li></ul><ul><li>ICEE- International Center </li></ul><ul><li>for Eye Care Education </li></ul><ul><li>(Australia & South Africa) </li></ul><ul><li>Operation Eyesight Universal </li></ul><ul><li>(Calgary, Canada) </li></ul><ul><li>Loan volume: $2.7 M </li></ul><ul><li>Investment to be used to build research institute and increase direct service delivery </li></ul><ul><li>Total number of patients treated in 2006 was 421,226. 36% of total surgeries were provided to poor patients for free. </li></ul><ul><li>Loan volume: $3 M </li></ul><ul><li>Investment is to be used to quadruple the number of surgeries performed </li></ul><ul><li>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. </li></ul><ul><li>Loan volume: $6 M </li></ul><ul><li>Investment goods to be financed: full-service general hospital with sub-specialties including ophthalmology. </li></ul><ul><li>Chittagong is largest eye hospital in Bangladesh, providing a high percentage of surgery at no charge </li></ul><ul><li>Loan volume: $0.25 M </li></ul><ul><li>Investment is to be used for the hospital’s rural expansion and training </li></ul><ul><li>More than 50% of patients receive free care and surgery </li></ul><ul><li>Loan volume: $1 M </li></ul><ul><li>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 </li></ul><ul><li>Loan volume: $5 M </li></ul><ul><li>Investment goods to be financed: New building for low pay/free section; re-financing debt </li></ul><ul><li>Total of patients treated was 43,068 in 2005. Of 6000 surgeries, 57% were performed free of fees </li></ul><ul><li>Loan volume: $0.25 M </li></ul><ul><li>Investment is to be used to construct a teaching institute building </li></ul><ul><li>More than 50% of surgery provided at no charge to the patient </li></ul><ul><li>Loan volume: $5 M </li></ul><ul><li>Investment is used to refinance debt </li></ul><ul><li>Total number of patients treated was 189,050 in 2006. 58% of its services were provided to poor non-paying patients </li></ul><ul><li>Loan volume: $3 M </li></ul><ul><li>Investment goods to be financed: distribution of spectacles, franchising optical shops, focused on Africa </li></ul><ul><li>Loan volume: $1.5 M </li></ul><ul><li>Investment is to be used for sustainability planning, training, and building clinics. This is the leading agency for international eye care in Canada. </li></ul>Note: All 11 applicants have 3 year financial statements available, audited by eternal financial auditors.
  18. 23. Eye Fund II Highlights <ul><li>Eye Fund II to commence once Eye Fund 1 is certain </li></ul><ul><li>Broader scope to include smaller investments (below $250,000) </li></ul><ul><li>Enable new financial intermediaries (IAPB and it’s larger members) to aggregate smaller financing needs </li></ul><ul><li>Online survey tool combined with business algorithms to identify, segment and pre-qualify potential investments (Database of 12,000+ eye care providers) </li></ul><ul><li>Online education and tools for sustainable organizational development and financing </li></ul><ul><li>Possibility of government and development agencies for guarantees </li></ul>
  19. 24. Changing the Competitive Landscape <ul><li>IAPB to “own” investing pool backed by government guarantees. </li></ul><ul><li>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: </li></ul><ul><ul><li>IAPB will have reduced the cost of due diligence by aggregating and pre-qualifying a sizable investing pool attractive to financial institutions </li></ul></ul><ul><ul><li>Secured government guarantees which will enable fund managers to more easily sell a fund with a higher credit rating </li></ul></ul>

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