Capria takes an innovative approach to adding value to the impact investing ecosystem. One way Capria does this is through The Capria Network, a deep trust and high collaboration peer network of emerging market fund managers committed to delivering superior results.
This is the third of a three-part series exploring a few of the ways that Capria Network members CONNECT, COLLABORATE, and CREATE to deliver superior results.
Emerging market fund managers have multiple issues to deal with, one of them is ensuring that the operations are in place for setting up a well-functioning and enduring investment firm capable of supporting multiple funds. Early-stage investors across Africa, Latin America, and Asia face similar problems when it comes to setting up a fund or supporting startups in setting up their business. Capria Network model works as follows- have a problem or an insight, discuss with network members and discover a viable solution.
The high-trust environment helps fund managers solve challenges, openly discuss their learnings and support each other not only within regions but globally.
The five main ways, Capria Network helps fund managers collaboratively solve their operational problems are as follows:
1. Sharing best practices and in-depth insights on fund set-up and operations
Vital topics such as fund structures, administration, team structure, and formation, etc. are discussed and analyzed in-depth during the Intensives and Co-Creates. This encourages network fund managers to learn from each other’s experiences. Experienced fund managers support the first time fund managers in navigating through basic fund set-up issues. For example, Adobe is a second time fund manager in Mexico while Prismapar is just setting up their first fund and they benefit from Adobe’s local knowledge and insight on fee structures, auditors, back-office operations, budgets, and costs.
Additionally, Virtual Workshops and other communication forums help members ask quick questions related to operational issues to other managers in their regions. For example, Edge Growth in South Africa learned about Lateral Capital’s LLC structure during a virtual workshop and followed-up with them to learn more as they explore different fund structures for themselves.
2. Learning about new innovations, tools and techniques
During Co-Create Global, Capital Invent from Mexico mentioned using LOIs with entrepreneurs to lay out operating principles on how the fund will work with entrepreneurs. They also mentioned using Net Promoter Scores (NPS) for investor interactions with entrepreneurs. Unitus from India was interested to learn more about both of these and had a discussion with Capital Invent to understand the details of these operational tools, their intent, and usefulness.
“These techniques that we heard about from Capital Invent are not being used in the Indian investing ecosystemright now. It was useful for us to discuss with them to learn more and investigate its relevance to our context.”
–Radha Kizhanattam, Investment Director, Unitus Ventures
3. Sharing and creating documentation assets for growth
The Content Library, Virtual Workshops, and other informal discussions give members visibility on useful resources that other fund managers use. The network enables cross-sharing of templates of GNG, IC memos, employment contracts, impact thesis, etc. For example, Performa in Brazil built up their entire impact portfolio management system from data collection, analysis to reporting based on the Unitus ESMS system. There is an ongoing engagement between the Impact & ESG Managers for Unitus and Pomona in sharing templates, systems and ideas and feedback on each other’s impact management approaches. This helps the fund managers save time by not having to recreate new systems and documents but they can refer to existing templates and also make a measurable contribution in advancing processes for the emerging market investing ecosystem.
4. Sharing insights from industry events and association engagements
Network members share their views on global, regional and local industry associations and events to gain from each other’s past experiences with these events. For example, the Latin American funds in the network like Terra, Capital Invent, Prismapar, Adobe, Performa and Fen have informally shared feedback on events like SOCAP, EMPEA, Super Returns, WRI, and other private equity events and benefited from their collective knowledge. This makes it easier for fund managers to understand which events to attend and to work together before attending an event to facilitate interesting panels and support each other by making introductions and planning relevant meetings.
5. Providing direct advice through involvement in each other’s fund or portfolio company governance
Nicole Rossell from Terra was invited by Performa to be a board member on their Forestries Fund given her experience in forestry and climate change. The specific expertise of each manager has enabled them to hold unofficial advisory positions as well as act as official board members for other Capria Network funds.
Recently, Erik from Adobe supported Pomona as an advisor. Since Adobe is seen as a leading experienced impact investor in Latin America, Pomona benefits from their expertise as they build the impact investing ecosystem in Central America.
Adobe has also shared their inputs on team building and structure with Prismapar as they set-up their fund. They have reviewed what roles and functions are most essential for Prismapar and recommended candidates as well as provided the ideal profile of employees to screen for.
“Input from Adobe has given us more perspective and significantly accelerated our process of setting up the fund.”
–Fernando Valenzuela, Partner, Prismapar
These examples highlight how fund managers learn and support each other by leveraging their diversity of experiences. All Capria Network fund managers have access to, and contribute to significant shared resources and expertise for fund set up, fund operations, access to capital, and most importantly, ongoing peer learning. This deep collaboration has enabled fund managers to successfully invest USD $259 million in 157 companies and achieve 16 profitable exits to date. By the end of 2019 the collective AUM of the Capria Network will rise to USD $863 million.
Do you want to be a part of the Capria Network? The final application deadline for our 7th Investment Cycle is just two weeks away, apply here NOW!