EFSE - Investment Protection - The provision of crisis-proof investments is a key aim of the Fund’s Management, even in turbulent times.

Investment Protection

The provision of crisis-proof investments is a key aim of the Fund's Management, even in turbulent times.

The Fund mitigates risks for investors through:

  • Partner lending institutions' eligibility criteria:
    The Fund only invests in partner lending institutions that fulfil a comprehensive set of eligibility criteria (e.g. sound financial performance, good governance, prudent management and clear target group orientation). The level of fulfilment of these criteria is rigorously analysed.
  • Investment monitoring:
    Partner lending institutions must submit quarterly information about the target group that has been reached. In addition, they must provide a set of financial reports on a quarterly basis.
  • Currency hedging:
    Investments of the Fund are primarily Euro denominated investments. If investments are denominated in other currencies, the Fund may engage in currency hedging operations. All losses and gains of foreign exchange operations are borne by C Shares.

The Fund aims at broad portfolio diversification by applying the following guidelines:

  • Maximum loan amount:
    The loan portfolio to one specific partner lending institution may not exceed 100% of the institution's equity.
  • Selected equity investments:
    Equity participation in any single partner lending institution may not exceed 30% of the institution's capital. The Fund is not allowed to become the single biggest equity investor.

The Fund's exposure is limited by:

  • Loan size:
    The loan portfolio to one specific partner lending institution may not exceed 100% of the institution's equity.
  • Equity size:
    Equity participation in any single partner lending institution may not exceed 30% of the institution's capital. The Fund is not allowed to become the single biggest equity investor.

The following guidelines ensure portfolio diversification on sub-fund level:

  • A maximum of 30% of the C Shares earmarked for any country or region can be invested in one partner lending institution.
  • A maximum of 15% of the Regional A & B sub-fund can be invested in one partner lending institution.