Investing for impact

Obviam's investment philosophy is guided by the belief that investing in commercially viable companies in emerging and frontier markets can provide investors risk adjusted returns, as well as generate sustainable, long-term positive impact. Investing in Small and Medium Enterprises (SMEs), mostly via private equity funds and financial institutions, is core to this philosophy.

Access to emerging and frontier markets

Emerging and frontier markets are often viewed as some of the most difficult places for investment. Barriers to foreign investors are related to political and economic risks as well as other difficulties in identifying, evaluating and structuring quality investment opportunities.

Over the course of more than a decade, Obviam has developed a robust and rigorous investment approach, providing access to emerging and frontier markets.

Local partnerships

We believe that locally based private equity fund managers are optimally placed to invest in SMEs on our behalf. Local know-how, networks and experience are key to help grow businesses. Local fund managers with knowledge of their markets, politics and economies are best placed to deal with these risks. On the ground, they are in a better position to manage any issues at investee companies. As an investor in emerging markets, we view local fund managers as more than intermediaries, they are our local partners.

Long-term relationships

Strong networks and deeply entrenched relationships with private equity funds are key to Obviam’s investment approach. Fund managers with whom Obviam has built long-term relationships over years of investing into their funds comprise a key part of its network. Since 1999 Obviam’s team backed numerous first-time managers, has witnessed the maturing of the private equity industry in emerging and frontier markets, and experienced various economic cycles together with these partners. Many of the managers initially backed by Obviam have successfully created solid teams and built strong track records. By investing in follow-on funds of these successful managers, Obviam benefits from supporting initial ventures.

Active ownership

Once invested, Obviam maintains relationships with local fund managers over the full investment period of its investments by participating actively in the governance of  our investee funds via Limited Partner Advisory Boards, monitoring investee company progress including visits at investee companies and arranging ad-hoc meetings with fund managers to seek improvements when deemed necessary

Diversification

Within its mandate, Obviam has developed a balanced portfolio diversified by country, region, sector, instruments (equity, mezzanine, debt, microfinance) and vintage.

Extensive due diligence

In order to enhance our ability to make better investment decisions and deliver superior investment returns, Obviam seeks to identify and mitigate the various risks arising in emerging and frontier markets. Obviam’s investment decision-making process usually takes several months, involving careful consideration of the broader political and economic macro-risks, as well as project-specific micro-risks. This involves on-site visits and interviews with fund managers, and considerable scrutiny of team quality, stability and abilities, financial performance and pipeline, potential value-add from strategic and operational active ownership, expected development impact, and approach to Environmental, Social and Governance (ESG) matters.

Responsible Investment

Obviam is committed to responsible investment, specifically integrating Environmental, Social and Governance (ESG) matters in investment decision-making and ownership practices. Responsible investment not only contributes to sustainable development in target markets, but provides a way to enhance the investment process by assisting to identify and manage risks, as well as to create value.

Collaboration

Since inception, Obviam’s team has built a wide network of investors, and today has extensive relationships with most of the bilateral and multilateral Development Finance Institutions (DFIs). These contacts constitute a competitive edge in deal sourcing, allow for synergies in due diligence and facilitate investor alignment and coordination in portfolio monitoring.