New York & Stamford, CT, USA
Aug 30, 2022
Developing World Markets (“DWM”), a U.S.-based private equity and debt manager with more than two decades of experience and a pioneer of modern impact investing, today released its 2022 Annual Impact Report, incorporating the industry’s newest impact benchmarks to demonstrate the real-world outcomes of DWM’s investments in the inclusive finance sector.
During 2021, DWM’s portfolio was invested in 34 countries across 82 inclusive finance institutions, reaching 16.8 million end clients. Nearly two-thirds of DWM’s end clients are poor or low-income people, a group that faces extreme barriers to accessing appropriate and responsible credit. And one out of every ten were previously unbanked individuals and entities, demonstrating DWM’s progress in expanding financial services.
“A resilient economy must be inclusive, and these impact results highlight our success at bringing more people and more small businesses into the global economy,” said Edward Marshall, DWM’s Co-Managing Partner. “Through the emergent pandemic recovery, we have redoubled our focus on managing investments to maximize impact alongside competitive financial returns.”
Throughout the report, DWM utilizes the new Global Impact Investing Network (GIIN) and 60 Decibels benchmarks to demonstrate the firm’s robust impact performance relative to peers. In a measure of DWM’s impact efficiency, the firm’s 2021 investment-weighted impact — that is, its impact accounting for the ratio of investment size to enterprise value — was 1,835 clients using responsible financial services per portfolio company at the median, compared to the GIIN benchmark of 1,724 clients.
The benchmarks also demonstrate DWM’s strong relative performance on gender equity impact within microfinance. On average, companies in DWM’s portfolio have 55% women clients, slightly higher than the GIIN benchmark of 52% for financial inclusion investments. The overall percentage of female end clients across DWM’s portfolio companies (77%) is also higher than the 60 Decibels Microfinance Index, where 67% of the 18,000 clients surveyed were women.
“As investors increasingly value transparency on impact performance, we are proud to help lead the industry by benchmarking our results,” said Hannah Schiff, DWM’s Director of Impact. “DWM strives to rigorously measure and manage its own impact, and then frame that impact with data that helps investors understand how our outcomes compare to others’ in driving progress on our biggest global challenges.”
Among the other highlights showcased in the report:
- DWM is strongly committed to ensuring responsible loan practices among its investees. 93% of DWM investees have implemented all seven Client Protection Principles, and 96% evaluate borrower cash flow to avoid over-indebtedness.
- Although DWM does not invest in carbon intensive industries, the firm believes that all impact investing should become carbon neutral. This core principle led DWM to become a signatory to the Net Zero Asset Managers Initiative and to develop tools to help investees improve their climate impact. Across DWM’s portfolio:
- 38% of portfolio companies offer green finance products aimed at mitigating the effects of climate change
- 58% have a firm-wide environmental policy
- 54% have an environmental policy for borrowers
- DWM end clients are geographically dispersed, with the highest concentration in Asia, followed by Latin America. They predominantly live in rural areas, where access to finance is especially challenging due to physical distance and typically lower levels of financial literacy, among other factors.
Click here to read the full report.
Founded in 1994, Developing World Markets (DWM) seeks investible solutions that sustainably address the social, environmental, and economic needs of the developing world. DWM began impact investing in 1999 and shifted exclusively to impact in 2007. DWM has over two decades of experience in emerging and frontier markets. Through DWM Asset Management, LLC, the firm’s SEC-registered investment adviser, DWM has originated and managed over $2.2 billion of private debt and private equity in impact-oriented enterprises, including over 900 loan disbursements and 25 private equity stakes in more than 70 emerging and frontier countries.
As a non-EU AIFM, with vehicles regulated by Luxembourg’s CSSF and Germany’s BAFIN, longstanding partnerships in the Netherlands, Germany, and now the Nordic region, and relations with institutional investors across the continent, DWM is dedicated to serving its European investor partners, with a shared commitment to impact.
George Spencer, BackBay Communications