SIFEM is mandated by SECO to develop a comprehensive portfolio of equity participations in private equity funds targeting small and medium enterprises (SMEs) within a list of selected emerging markets. SIFEM may also act as co-investor in the underlying portfolio companies of its private equity funds, and make direct investments in financial institutions with an SME or microfinance lending focus.

SIFEM's investments under the SECO mandate are made on a purely commercial basis whereby SIFEM invests exclusively in profitable projects and charges market rates for its products and services. Equity participations in private equity funds typically range between 15-30% of total fund size, and do not usually exceed USD 12.5 million. Direct investments are capped at USD 8 million. No more than 20% of SIFEM's total capital commitment may be invested in any single country or industry with the exception of the financial services industry. Having met the profitability threshold, SECO portfolio investments should also demonstrate the following:

Leverage        

Share the financial returns and the political and commercial risks with private investors, maximizing private investment flows to target countries.

Subsidiarity    

Target companies with no access to capital markets at reasonable terms.          

Additionality              

Enhance investment performance through active provision of management expertise to portfolio companies, implementing appropriate management practices, and improving accounting, corporate governance, reporting, quality control, marketing and business strategy.

Sustainability

Adhere to social and environmental sustainability principles.