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BlueOrchard Acquires Minority Stake in CHF Development Finance International

Published 11/16/2011 by Global Communities

BlueOrchard Acquires Minority Stake in CHF Development Finance International
The Luxembourg-based Microfinance Private Equity Fund Now Owns 20 Percent of the Company
Silver Spring, MD (November 16, 2011)—CHF Development Finance International, LLC, a holding company established by the global development and humanitarian assistance organization CHF International (CHF), has raised $1.6 million through the sale of a 20 percent stake to the BlueOrchard Private Equity Fund (BlueOrchard).
CHF Development Finance International, LLC was established by CHF in September 2006. Its incorporation was considered, and remains, a landmark step by an international non-profit organization to commercialize and consolidate its operations as a way to grow through socially responsible investment versus donor funding alone.
BlueOrchard’s entry marks the first of several capital injections that CHF Development Finance International is planning to raise from private sector like-minded social investors, as the company further consolidates other CHF microfinance operations and expands into new countries.
CHF will continue to own 80 percent of the company, which it established to own and manage CHF’s commercially-oriented microfinance subsidiaries across the globe. Currently, the company owns two subsidiaries in Lebanon and Romania, and plans to include the rest of CHF’s subsidiaries in the Middle East and Europe, in addition to expanding through the establishment of new commercially-oriented microfinance operations in the Middle East.
BlueOrchard’s subscription represents a 30 percent premium over book value, a testament to the strong long-term growth potential of CHF’s microfinance operations.
“We are extremely pleased to have BlueOrchard as a partner,” said Elissa McCarter, Vice President for Development Finance at CHF International. “BlueOrchard shares our commitment to responsible finance and to generating both financial and social returns by meeting the financial needs of low and medium-income clients. They have shown needed flexibility during this early stage investment in recognition of the challenging environments in which we work, particularly in the Middle East, which is a region of focus for the company.”
“This investment is BlueOrchard’s first direct participation that focuses on the Middle East, a region that presents a tremendous growth potential. Our partnership with CHF is intended to be a long-term partnership through which we can develop inclusive financial systems and build synergies across a vibrant market,” says Jean-Philippe de Schrevel, CEO of the BlueOrchard Group.
With this transaction, CHF has signaled to the financial market its commitment to a commercial model of microfinance to increase market outreach and therefore extend its social impact and the mission of the parent organization, CHF International. This transaction also strengthens the company’s capital structure, increases the flexibility of how it raises financing, and allows it to have seed capital to enter new countries and expand services to thousands of additional low-income families and small businesses.
CHF International (CHF), founded in 1952, is an international development organization that works in post-conflict, unstable and developing countries. CHF partners with communities around the world to help them to improve and direct their lives and livelihoods. The organization believes that those best suited to decide what a community needs are the people from the community itself. Based in Silver Spring, MD, CHF is a politically neutral, non-profit 501(c)(3) organization. CHF Development Finance International, LLC is a limited liability company registered in the State of Maryland and majority owned by CHF. 
The BlueOrchard Group is a global leading commercial microfinance investment manager providing loans to microfinance institutions through various funds managed by BlueOrchard Finance S.A. since 2001, and acquiring strategic minority stakes in microfinance institutions through the BlueOrchard Private Equity Fund since 2007. With investment managers headquartered in Geneva, and offices in New York, San Francisco, Lima, Bogota, Bishkek, and Phnom Penh, the Group manages more than $1 billion, with a view to achieve double bottom line returns: positive social impact to low-income populations and financial returns for its private and institutional investors globally.