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Barak Fund Management Ltd
Corporate Profile
Q4
20
17
ZURICHLegal Office
SWITZERLAND
Given that a large portion of Barak’s investors are located within Europe, and predominately Switzerland, the company has a legal distribution licence within the country with a regulated Swiss Legal Representative Office. This allows active marketing and distribution within the country.
LONDONAdvisory Office
UNITED KINGDOM
Barak has opened an advisory office in the UK from an investor marketing and distribution objective, operating under a UK regulated licence. Barak has also placed one of our Deal Originators in the region to focus on the metals and minerals sectors in Africa.
KENYA
MAURITIUS
IVORY COAST GHANA
SWITZERLANDUNITED KINGDOM
Representative Office
ABIDJAN
• Deal origination• Growth in West Africa has been
seen widely across the globe• Financing of cocoa and nuts -
predominantly cashew nuts• Increasing Barak’s footprint wider
across the African continent
IVORY COAST
Investment Advisory• Deal Origination • Deal Operations and Facilitation• Deal Systems and Monitoring• Investor Relations and Marketing• Credit Risk Monitoring• On-site Due Diligence Monitoring
Advisory OfficeJOHANNESBURG
SOUTH AFRICA
Management OfficePORT LOUIS
Head Office
• Finance
• Compliance
• Cash Management
• Investment Committee Chair
• Investor and Administration Relations
MAURITIUS
• Deal origination• Growing exposure in East Africa• Strong exposure to fertilizer, pulses
and rice commodity sectors• Demand for FMCG financing has
grown steadily on the uptake in the urbanisation movement during the last two years
Representative Office
NAIROBI
KENYA
Barak Offices
SOUTH AFRICA
Representative Office
ACCRA
GHANA
• Deal origination• Growth in West Africa has been
seen widely across the globe• Financing of cocoa and nuts -
predominantly cashew nuts• Increasing Barak’s footprint wider
across the African continent
Contents
Company Structure 4
Barak by Numbers 5
Barak Performance Timeline 6Historical Highlights 6
Introducing Barak Fund Management Limited 7Company Overview and Strategy 7
Barak in Africa 8Why Invest in Africa 8Barak in Africa 9Barak Deal Case Studies 10
The Barak Fund Portfolio 12Fund Portfolio 13Investment Universe and Restrictions 14Historical Performance & Service Providers 15
The Team 16Anatomy of a Trade 16Barak Staff by Country 17Fund Managers 18Investor Relations 23
Barak Fund Exposure 24Country Exposure 24Commodity Exposure 25
Awards 26
4
Company Structure
Asset Management
Mauritius
FEE
S
INT
ER
EST
Mauritius
South Africa
CIO:Prieur Du PlessisJean Craven
Fund Advisors:Derek PostmaMatthew RobinsonErik ViljoenClayton TaylorSariel PolatinskyKyle SmithJustin Murray (Asha Fund)
Lisa MajminNayen Kavia (Kenya)
Celestin Gakuba (Ivory Coast)
Yaw Keteku (Ghana)
Richard Lee (UK)
Fund Analysts:Zeno van Gils (UK)
Rowan McKenzieChristof LombardEmily Adendorff
Jo RobertsHardi Wilkins
Hardi Wilkins Jo Roberts
Cayman Islands
Financial Services Advisory & FX Trading
BARAK FUND MANAGEMENT BARAK ADVISORY
RIPARIAN ADVISORY
FUND ADVISORS
ADVISORS ADVISOR ADVISOR
BARAK FUND SPC
FactoringLicense
CREDIT SOLUTIONS
AdvisoryLicense
FX ADVISORY
AdvisoryLicense
CAPITALADVISORY
THE FUNDS
The Company
Barak StructuredTrade Finance Fund
Barak ImpactFinance Fund
Barak ShantaCommodity Fund
Barak Mikopo AfricanDevelopment Fund
Barak Asha AfricanLong-Term ImpactFund
Barak Ibdar Shariah Trade Finance Fund
Barak by Numbers
5
The Company
6FUNDS(3 Launched
2016)
FUNDMANAGERS
2 Chief Investment Officers5 Deal Originators (South Africa)
1 Deal Originator (Kenya)1 Deal Originator (Ivory Coast)
1 Deal Originator (Ghana)4 Deal Analysts
4 Deal Administrators2 Head of Compliance
7 Credit Committee Members3 Investor Relations
3 External Fund Marketers
BARAK FIRM AUM
STF Fund $600mBIF Fund $10mShanta Fund $15mMikopo Fund $50mAsha Fund $1mSharia Fund $30mTotal: $706m
BarakFounded
2008Barak Asset Management
&Barak Advisory
INVESTORSSTF
RETURNS2009 15,99%2010 16,47%2011 16,17%2012 14,41%2013 13,98%2014 11,46%2015 10,98%2016 9.24%2017 YTD 5.18%Cumulative 190%
2017DEAL PIPELINE
Equipment USD 107,5mnFMCG USD 83,5mnOil & Fuel USD 70mnMaize & Wheat USD 33,5mnFertiliser USD 27mnCocoa USD 19,3mnNuts USD 18mnRice USD 17,2mnCement USD 16mnVanilla USD 15mn
STF AUM2009 USD 8,06m2010 USD 16,33m2011 USD 22,75m2012 USD 36,75m2013 USD 65,63m2014 USD 169,44m2015 USD 252,80m2016 USD 400m2017 (current) USD 600m
OFFICES
1 x Mauritius2 x South Africa*
1 x UK1 x Kenya*
1 x Ivory Coast*1 x Ghana*
1 x Switzerland**
* Advisory Offices** Legal Office
Exposures25
30
110
Countries
Counterparties
Commodities
FUND DOMICILEDCayman Islands
MANAGEMENT CO.Mauritius
FUND ADVISORYSouth Africa,UK, Kenya,Ivory Coast
100Years
Fund ManagersCumulativeExperience
Institutional 45%Family Offices 30%HNWI 10%Pension Funds 10%DFI’s 5%No. of Investors: 180
Barak Performance Timeline
HISTORICAL HIGHLIGHTS
September 2008: Barak Fund Management Founded
February 2008: Launch Barak Structured Trade Finance Fund ($0,30m AUM)
December 2010: 16.50% Return
December 2011: 16.17% Return
December 2012: 14.40% Return, 25 Counterparties
December 2013: 14% Return
March 2014: Launch Barak Shanta Commodity Derivative Fund
July 2014: Launch Barak Impact Finance Fund
December 2014: 11.50% Return, 60 Counterparties
May 2015: Breaks $200m AUM mark
July 2015: First European Pension Fund on-board
September 2015: Open Kenyan & Ivory Coast Advisory Representative Offices
December 2015: 11% Return
March 2016: Open Barak UK Office
April 2016: Breaks $300m mark, 85 Counterparties
May 2016: 3 New Barak Funds Launched
2016: 28 Employees
June 2016: STF Breaks the $350m AUM mark
September 2016: Breaks 400m AUM mark
September 2016: Launch Barak Ibdar Sharia Trade Finance Fund
December 2016 9.24% net returns achieved for the STF Fund
March 2017 100+ Counterparties in the Barak portfolio across African trade
April 2017 Saudi Sovereign Wealth Fund On-boarded into STF Fund
May 2017 Largest South Korean Bank On-boarded into STF Fund
May 2017 4 new Deal Originators in South Africa
June 2017 Saudi Sovereign Wealth Fund On-boarded into Mikopo Development Fund
June 2017 Barak and African Capital Invest (ACI) Collaboration
June 2017 Largest pay-out in Barak deal history completed
July 2017 Barak STF Fund reaches Soft Close of $500m AUM, Investor Queue initiated
August 2017 Pipeline deal pay-outs exceeds $200m mark across 5+ countries in Africa
September 2017 Open Barak Ghana Representative Office
2008
0
50,00
100,00
150,00
200,00
250,00
300,00
350,00
400,00
450,00
500,00
550,00
600,00
650,00
700,00AUM $m
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Barak Founded
Launch of STF FundLaunch of
Shanta Fund
11.5% Return60 Counterparties
Breaks 200mAUM mark
Breaks 300mAUM mark
85 Counterparties
Barak UK Office Opened
Breaks 400m AUM mark
100+Counter-
parties
4 New Deal Originators
Largest Payout in Barak Deal History
Launch Barak Ibdar Sharia Fund
3 New Fundslaunched
First EuropeanPension Fund on-board
The Company
9.24% net returns for STF Fund
STF FundSoft Close $500m
Pipeline deal pay-outs exceeds $200m
Barak Ghana Office Opened
16.50% Return
16.17% Return
14.4% Return25 Counterparties
14% Return
Launch ofBIF Fund
28 Employees
Breaks 350mAUM mark
6
The Company
7
Barak Fund Management Ltd
COMPANY OVERVIEW AND STRATEGY
Barak Fund Management, the asset management arm of the company Barak, was founded in 2008. The company has a portfolio of 6 Funds under management with an AUM in excess of $800 million, providing fund management solutions to a range of global investors and funding to an extensive list of counterparties throughout sub-Saharan Africa. Barak’s core investment is related primarily to the soft agricultural commodities and food product-related sectors. Barak is domiciled in Mauritius with a presence in South Africa, the United Kingdom, Kenya, Ivory Coast and Ghana.
The company seeks to generate quasi-equity (or equity-like) returns in capital-constrained markets with relatively low volatility and limited correlation, as compared to the broader global markets. Barak’s strategy focuses on fully-funded debt in the African growth and expansion capital finance arena, with no equity correlation, using asset-backed loans supported by various forms of security collateral.
Barak, having established its success in Africa within short-term trade finance funding since early 2009, has seen the natural progression from this shorter-term working capital focus to the longer-term asset-backed lending space to meet the continent’s infrastructural and project financing. With the continued success of the Barak STF, Impact Finance and Shariah Trade Finance Funds, the Mikopo and Asha Funds continue to uphold Barak’s status as the leading alternative financier in Africa, complementing all of its borrowers’ needs.
The Barak investment approach is based upon the principles of discipline, diversification, collateralization and downside-case scenario valuation. The company acknowledges that African investments encompass a certain degree of risk given the nature of investing in a continent whose primary markets are influenced by a multitude of volatile factors. Each investment is thus approached with a stringent on-boarding process – using both desktop and on-the-ground due-diligence processes – in order to determine the viability of a potential project’s funding.
REGULATOR:FINANCIAL SERVICES COMMISSION – FSC (MAURITIUS)
The Fund
Why Invest in Africa
This is an opportunity to hedge against volatility in cash, bond and equities Jean Craven
The Barak team has a unique aptitude to harness opportunities which consistently outperform in all macroeconomic scenarios by constructing portfolios according to investment mandate whilst applying their individual flair for deal structuring; additionally, the ability to exist when required is accounted for.
RISK MANAGEMENTAccess to credit remains a hurdle for SMEs in Africa. Fund Managers in Africa have a proven track record in a niche market, managing capital (liquidity) over market cycles, delivering strong absolute and risk-adjusted returns. Barak focuses on worse-case scenario analyses prior to investing.
STRONG COMMODITY RESOURCES LONGEVITY IN AFRICA As we look ahead into the next 20 years, the combination of growth factors that Africa presents today will create unrivalled opportunities for investors in the long term. The continent’s vast natural resources and its fast-growing economies and young population will sustain high levels of FDI that make Africa’s rise inevitable.
Although a too-reliant approach to the export of natural resources is not solely the approach for Africa’s growth, if managed correctly, the opportunities for Barak’s role in the continent’s trade finance activities is sure to abound in the foreseeable future.
Strong Pipeline Of Opportunities
GLOBAL TRADE FINANCE GAP
trillion$1.6=• A significant amount of this gap coming from emerging
markets.
• SMEs are largest client segment to have demand for alternate financing such as Barak.
• Basel III created a major impediment for banks to enter this space.
SMALL TO MEDIUM SIZED ENTERPRISES (SME’S) ARE AT THE HEART OF AFRICA’S CURRENT ECONOMY.
The small business sector in Africa has the potential to make a significant contribution to economic growth and employment across the continent, and with the rich mineral resources this is the most suitable business sector on which to spend a considerable amount of time and money. These small and growing businesses create around 80% of the region’s employment, establishing a new middle class and fuelling demand for new goods and services. The scale of this transformation should not be underestimated, and opportunities are abound to be taken advantage of.
Barak currently sits with a particularly strong pipeline of opportunities within Africa. Traditionally this may have focused on agricultural soft commodity sectors, there is now a range of diversified sectors including: equipment, energy, metals and minerals sectors to name a few. The range of countries within the pipeline total some 25 jurisdictions across 15 commodity sectors, all pertaining to the need to fill the African emerging markets’ import and export financing gap.
commodity sectors
jurisdictions
15
25
IN EM COUNTRIESRISK & REWARDBy 2035 the number of young Africans joining the working age population will exceed that of the rest of the world combined. The foundation of any long-lasting venture in Africa depends on the continuous empowerment of regional SMEs and young
entrepreneurs. Africa’s young people and SMEs are central to the stability of the world’s economy. Although perceived risk abounds, Barak has the team and experience to mitigate any contributing factors. 8
9
Fertilizer,Petroleum Products,Equipment, Steel
ZAMBIA
Metals (Copper), Chemicals,Coal
DRC
Coal, Locomotives, Vanilla
MAURITIUSTANZANIA
MALAWI
MOZAMBIQUE
MADAGASCARMAURITIUS
SOUTH AFRICA
BOTSWANA
NAMIBIA
GHANA
IVORY COASTNIGERIA
SENEGAL
DRC
KENYA
UGANDA
Barak in Africa
Energy Generation, Equipment, Fuel,Juice Production
GHANA
Fertilizer,Pulses ( Pigeon Peas), Rice, Cement
KENYA
Pulses (Pigeon Peas),Cashew Nuts, Rice,Fertilizer
TANZANIA
Vanilla
MADAGASCAR
The Company
Metals & Minerals, Electronic Equipment, FMCG, Coal, Cement, Fruits & Raisins,Gypsum
SOUTH AFRICA
ZAMBIA
10
DEAL CASE STUDYSECTOR: FMCG Various Products
BACKGROUND: Borrower is the Largest FMCG manufacturer in Zambia and one of the major manufacturers in the region. With Barak’s investment, they are looking to restructure their existing working capital finance facility to an instalment sale type agreement over their production building as well as the machinery used in the manufacturing of FMCG products.
3 Year Amortising Loan with collateral structures:
• Bond over property• GNB over machinery• Cession of debtors• First Demand Guarantee• Subordination of
shareholders’ loans
DEAL CASE STUDYSECTOR: Energy (Generators) & Power Equipment
BACKGROUND: Counterparty has grown into a globally recognised Independent Power Producer (IPP). The business specializes in providing custom engineering turnkey distributed generation energy solutions for mines.
Stock finance facility with following collateral structures:
• Loan Agreement between the Borrower and Lender
• Incoming LC with Barak noted as the Beneficiary
• Cession of debtors
Barak Deal Case Studies
Power Generator Equipment Import Financing
GHANA
The Fund
Electronic Equipment Import Financing
SOUTH AFRICA
DEAL CASE STUDYSECTOR: Mobile Handsets and Mobile Tablets
BACKGROUND: Competitively priced Mobile Handsets & Tablets that perform functions of ‘smart-devices’. Large global traders fill the off-taker role. Counterparty has grown significantly since Barak financing relationship.
Import stock finance facility with collateral structures:
• Stock under Purchase and repurchase agreement
• Cession of Asset Insurance with Barak’s interests notice; insurance to cover warehouse and logistics
• Personal signed guarantees
Madagascar Vanilla Export Financing
MADAGASCAR
DEAL CASE STUDYSECTOR: Vanilla Commodity
BACKGROUND: Natural Vanilla is a niche, supply-driven market of approximately 2,000 tons per year on average, originated overwhelmingly in Madagascar for destinations in Europe and the USA. Borrower will source at small-scale farmer level and manage interim storage and initial processing.
Stock & Debtor Finance Facility with collateral structures:
• Solid reputable shareholders
• Fixed Price Offtake with minimum quantities
• Blue-chip Off-takers• Product will be placed
under CMA
FMCGExport Financing
ZAMBIA
11
DEAL CASE STUDYSECTOR: Energy & Power Generation
BACKGROUND: The Borrower is a company investing in power and energy infrastructure in Sub-Saharan Africa, one of the world’sfastest-growing regions. Africa remains chronically short of power and energy infrastructure – its electricity sector alone requires over $30bn of investment annually to sustain economic growth. The Borrower will play an increasing role in fostering the growth of the region’s power and energy infrastructure.
Power Infrastructure Funding Transaction with following collateral structures:
• Pledge of shares held by Borrower
• Cession of dividends received by Borrower
• Cession of Borrower’s management fees received Off-taker
• Cession of cash flow intended to settle the additional capital contributed by the Borrower
DEAL CASE STUDYSECTOR: Marine Equipment
BACKGROUND: The Borrower constructs naval and commercial vessels in aluminium and steel that represent the best value and quality in the market. They are innovative, each craft is custom built to the owner’s specific requirements. Specific requirement is for vessels to patrol oil rigs off the coast of Nigeria.
Sale and Lease Back Transaction with following collateral structures:
• Cession of shares of Borrower• Cession of lease agreement
between Borrower & Off-taker
• Cession of insurance in the name of Borrower
• Cession of the Borrower Bank Collections Account
Barak Deal Case Studies
Power Infrastructure Financing
Boat Equipment Financing
Fruit Juice Concentrate Export Financing
SENEGAL NIGERIA GHANA
The Fund
Raisins Export Financing
SOUTH AFRICA
DEAL CASE STUDYSECTOR: Raisins
BACKGROUND: The Borrower is a processor of high quality raisins, which are produced along the banks of the Orange River in the Northern Cape, South Africa. The raisins are used for the export markets of North America, Europe, Africa and the Far East. There are approximately 250 growers along the Orange River.
Stock and Debtors revolving facility Finance Facility with following collateral structures:
• Fixed assets of Farm• Storage bins of Commodity• Stock - 90% loan to value • Debtors book
DEAL CASE STUDYSECTOR: Fruit Juice Concentrate Production
BACKGROUND: The Borrower is the largest juice processing and exporting company in West Africa with more than 300 workers and sources fruit from more than 3,000 small scale farmers in Ghana. The juice business spans the globe and includes sourcing, production, logistics, blending and sales.
Stock & Working Capital Finance Facility with following collateral structures:
• First Ranking Security interest over the Collateral
• First Demand Guarantee equal to the Facility Amount
• Barak to be noted as a loss payee on the Asset Insurance policy
The Fund
12
Barak Fund Portfolio
Barak currently manages six funds, with cumulative AUM in excess of $800 million.
The Barak Structured Trade Finance Fund was launched in February 2009, with the other two funds formed in mid-2014.
All three funds focus on consistent, securitised investments and have returned solid performances since inception.
Three new funds were launched in 2016.
EXSISTING FUNDS DESCRIPTION
Barak Structured Trade Finance Fund Alternative Short-term Credit
Barak Impact Finance Fund Alternative Short-term Credit Impact Focus
Barak Shanta Commodity Segregated Portfolio Fund Agricultural Commodities Relative & Directional Trading
NEW FUNDS DESCRIPTION
Barak Mikopo Fund 1-3 Year Alternative Asset-backed Development Credit
Barak Asha Fund 7-10 Year Impact Mezzanine Finance Fund
Barak Ibdar Sharia Trade Finance Fund Alternative Short-term Shariah-compliant Credit
Structured Trade FinanceImpact Finance FundSTF Sha’ria Compliant
SHORT TERM FUNDS
Mikopo Development Fund
MEDIUM TERM
Asha Impact Finance Fund
LONG TERM EVOLUTION OFBARAK
The Fund
6
By applying a combination of extensive fundamental research, rigorous quantitative and technical analysis the portfolio seeks superior performance through identifying both short and long term trading strategies.
The fund will also at times deploy macro and currency related strategies that complement the portfolio.
Accessing a range of listed products, including options and derivatives, the fund invests primarily in listed agricultural commodity instruments.
The Asha Fund identifies assets in growth markets, providing an alternative option to traditional funding, these funds will be utilized for expansion and growth of core businesses which have a strong focus on social impact.
The Fund’s objective is to generate sustainable risk-adjusted returns, targeting 12-16% per annum USD returns. Debt of varying maturities is secured by tangible operating assets and cash flows with the option to convert to equity.
Agricane Agricultural Development and Management Consultants fulfil the role within the fund of being the agricultural specialists, with the remit to manage all investments that the Barak Asha Finance Fund invests in. They have been retained for monitoring, measuring and reporting on our predefined impact criteria.
Asset/Commodity-Backed Structured Trade Finance Fund focusing on African alternate financing opportunities with the underlying structure being fully Shariah-compliant. Shariah-compliant reporting a necessity for the Fund, working with Fund Scholars in both South Africa as well as out of the Middle East
Active Fund marketing within the Middle Eastern regions where the demand for Shariah-financing is rife.
Collaborating with Bahrain’s leading private investment bank Ibdar Bank, launching the relationship in November 2016.
The Fund’s objective is to generate sustainable risk-adjusted USD returns, targeting 12-16% per annum, on capital over the medium term (3 years), with investments that are supported by a pool of high quality collateral.
Credit and yield enhancement of the portfolio can be provided through a first loss underwrite: loan-to-value- approximately 80%; Barak’s conviction in ability to source quality deals is actionable through this structure. Gearing of up to 250% generates the equity enhancements as well as the profit warrants/options structure.
Barak is tapping into an opportunity set that lends itself to the investment objective: More than 50% of individuals in Africa have no access to formal financial institutions. Only about 30% of small and medium-scale enterprises, have access to credit from banks.* Development Finance seeds growth.
The Fund will not invest in any fossil fuel assets such as coal, diesel or petroleum, any metals, minerals and ores extracted from the ground, in any business where the primary business is that of extraction of minerals or any such commodities.
The Fund may invest in bitumen, paraffin and kerosene, fertiliser products such as urea, MAP, ammonia nitrate, CAN, phosphorous rock and acid sulphur and sulphuric acids.
The Fund will leverage off of globally-recognized Impact Investment Key Principles in order to construct its own set of Barak Impact Reporting Criteria.
Key Impact Criteria include:• Job Creation• Food Security • Environmental and Social Responsibility
SHANTA COMMODITY DERIVATIVE FUND(Tenor: Monthly) The fund focuses primarily on relative value and directional trading opportunities within the agricultural commodity markets.
SHARIAH FUND(Tenor: 150 Days) The Barak team has a unique aptitude to harness opportunities which consistently outperform in all macroeconomic scenarios by constructing portfolios according to investment mandate whilst applying their individual flair for deal structuring; additionally, the ability to exist when required is accounted for.
MIKOPO DEVELOPMENT FUND(Tenor: 1-3 Years) The Mikopo Fund (Mikopo meaning “Credit” in Swahili) focuses on providing asset-backed short- to medium-term trade, working capital and expansion capital finance to African SMEs, in support of development.
ASHA FUND(Tenor: 5-7 Years) The Barak Asha Impact Fund focuses on providing Mezzanine loan finance to African SMEs projecting strong underlying growth and cash flow generation in support of development impact, primarily in the agri-sector.
IMPACT FINANCE FUND(Tenor: 150 Days) Asset/Commodity-Backed Structured Trade Finance Fund focusing on African alternate financing opportunities with an Impact Investment focus
Track record of 8 years, no negative monthly returns recorded since inception.Solid year-on-year growth to bring current AUM in excess of $650m.
Portfolio currently working with 90+ counterparties across 20 countries and 25 commodity sectors.
Investment Universe: Small and medium sized sub-Sahara African businesses projecting strong underlying growth and cash flow generation with secure returns.
The Fund has created a diverse investment portfolio to mitigate economic, sector and volatility risk, which capitalises on the Fund’s independence and absence of conflicts. Due to its broader agricultural fund platform, strong diversification is formed across Geography, Industry, Sponsor, and Strategy.
STRUCTURED TRADE FINANCE FUND(Tenor: 180 Days) Asset/Commodity-BackedStructured Trade Finance Fund focusing on African alternate financing opportunities
Barak Fund Portfolio
Investment Universe and Restrictions
The Fund
BARAK BUILDS A PORTFOLIO OF OUR HIGHEST CONVICTION INVESTMENTS
• Portfolio composition is driven by deal origination and selection
• Particular attention is paid to geographic and counterparty diversification
• Position sizing is a function of both cash availability and of risk/reward profile of the transaction
• Average size of transactions have increased to $7.5 million given strong Barak AUM growth in investor interest
INVESTMENT MANDATE CONSTRAINTS
STF FUND INVESTMENT MANDATE LINK
Geographic Exposure
Sub-Saharan and East AfricanMain focus countries: Botswana, Malawi, Tanzania, Mozambique, DRC, Rwanda, Ethiopia, Ghana, Kenya, South Africa, Uganda, Zimbabwe and Zambia.
Typical Industry Exposure
Agricultural and natural resource commodities, non-agricultural general goods. Asset-intensive businesses with acceptable collateral as per offering memorandum. The objective is to maintain a 50-75% minimum exposure to Agriculturally-related transactions.
Maximum Position Limits
20% per single counterparty/borrower20% per commodity type/asset class20% per country (ex. South Africa at 30%)40% in non-agricultural general goods
Minimum Position Limits20 unique investments (2 years from inception)10 different counterparties
Average Portfolio Turnover 30% of portfolio per annum
Average Tenor per Transaction Approximately 180 Days
14
The Fund
BARAK FUND HISTORICAL PERFORMANCE
STF BIFF Shanta Mikopo Sharia
Rolling 12-Month Return 8.14% 6.44% 17% 7% -
12-Month Standard Deviation 0.05 0.1 6.41 0.2 0.2
Cumulative Return Since Inception 191% 28% 125% 10% 4.25%
Percentage of Profitable Months 100% 100% 60% 100% 100%
BARAK FUND SERVICE PROVIDERS
Pricing Agent: Commodity Insight Africa
Collateral Managers: Global Collateral Control (Pty) Ltd, CMI, DRUM, ACE
Custodian: The Standard Bank of South Africa Ltd
Administrator: Admiral Administration Ltd (Part of the Maitland Group)
Auditors: PwC
Legal Advisor – South Africa: Weksmans Attorneys
Legal Advisor – Cayman Islands: Harney Westwood & Riegels
Legal Advisor – USA: Foley Hoag LLP
JSE Sponsoring Broker: J & E Davy
BARAK FUNDS CUMULATIVE RETURNS
15
200%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
STF Fund Impact Finance Fund Since July 2014Since Feb 2009 Since May 2016Since Feb 2014 Since Nov 2016
Shanta Commodity Fund Mikopo Fund Sharia Fund
INCEPTIO
N
~JUN-1
0
~JUN-1
2
~JUN-1
5
~JUN-1
4
~JUN-1
3
~JUN-1
1
~JUN-0
9
~DEC-09
~DEC-10
~DEC-11
~DEC-12
~DEC-13
~DEC-14
~DEC-15
~JUN-1
6
~JUN-1
7
~DEC-16
~AUG-17
The Fund Managers
16
The Team
The Investment Team’s skill set reflects over 50 years of combined experience in Asset Management on the African continent, principally in the commodity derivative and physical commodity trading environment – offering the following key advantages:
• An extensive knowledge of volatile markets where experience is of paramount importance in order to successfully adapt to changes and broach new challenges. (However, while taking cognisance of volatile equity markets, we maintain no correlation to them.)
• Well-established and long-standing client relationships provide positive exposure for repeat business, reinforcing Barak’s growing reputation and progressive performance in Africa.
• A broad, reliable network of professional investors off which to leverage project funding and repeatable global exposure within Barak’s existing and prospective investor bases.
• A team of enthusiastic Fund Advisors who recognise that an on-the-ground investment presence is paramount to the success of any project.
ORIGINATION PROCESSING WAREHOUSING SHIPPING DISTRIBUTION RETAIL
$SELLER BUYER
ANATOMY OF A TRADE
17
Barak Staff by Country
MAURITIUS1 x CFO
2 x Senior Compliance
1 x Fund Manager
SWITZERLANDLegal Representative Office
UNITED KINGDOM1 x Deal Originator (Metals)
1 x Deal Analyst
2 x Fund Distribution
SOUTH AFRICA2 x CIO
1 x COO
3 x Credit Specialists
6 x Deal Originators
4 x Deal Analysts
2 x Fund Distribution
IVORY COAST1 x Deal Originator
GHANA1 x Deal Originator
KENYA1 x Deal Originator
The Fund Managers
The Fund Managers
PRIEUR DU PLESSISJoint-Chief Investment Officer
Prieur is a co-founder of Barak, with more than 15 years of experience in the commodities trading and financial services arena. During his career he headed the structured trade and commodity finance division at Absa Bank, a subsidiary of Barclays Bank Plc, as well as the soft commodities origination team for Standard Bank.
Before becoming involved in a structured commodity finance deal-making role at Rand Merchant Bank (of the First Rand Group), Prieur initially managed the treasury operations of the bank’s commodities trading. During his tenure at Rand Merchant Bank, he was a key member of the team that completed the first successful grain securitization in the world, and led the team that established the third largest crop insurance company in Africa. He was part of the Standard Bank team responsible for the launch of a three-year Jatropha production finance product – the first bio-fuel finance product of its kind.
Prieur is a qualified chartered accountant and completed his public training with PricewaterhouseCoopers.
JEAN CRAVENJoint-Chief Investment Officer
Jean has more than 18 years of experience in building and managing commodity trading businesses at leading South African financial institutions. His commodities business was one of the first active participants in the South African Commodity Futures Exchange and Jean served on the South African Futures Exchange advisory panel for many years.
Prior to co-founding Barak with Prieur, Jean built and led a new team at Standard Bank that covered structured commodity finance, physical and derivative trading as well as agricultural and bio-fuel project finance. Previously, Jean worked for Rand Merchant Bank (of the First Rand Group) heading up a team that completed the world’s first successful one billion US dollar grain securitization. This same team also set up the third largest crop insurance company in Africa to mitigate weather risk on farmer production loans for the First Rand Retail Bank.
Jean holds an accounting degree from the University of Stellenbosch in South Africa.
18
The Fund Managers
The Fund Managers
19
VINCENT FREEMANTLEChief Operations Officer
Vincent is a CA (SA) with the South African Institute of Chartered Accountants. He has contracted to the Johannesburg Stock Exchange and worked at the Financial Asset Services Custody division of the Standard Bank of South Africa, where he qualified with both the STRATE Equities and Bonds Compliance Officers Examinations (2006) and held the position of Risk and Compliance Officer. He later held the position of Financial Officer for BoE Stockbrokers (Pty) Ltd.
Vincent qualified as a stockbroker and member of the South African Institute of Stockbrokers in his own right in 2010.
Prior to joining Barak, Vincent was Vice President, Financial Accountant and initial CFO for Credit Suisse Securities (Johannesburg) (Pty) Ltd, a subsidiary of the global Credit Suisse (AG) group, where he performed a wide range of financial-related activities within the business as well as the wider industry.
KEVIN RAMSAMYChief Financial Officer
Kevin is a member of the global Association of Chartered Certified Accountants (ACCA) with over 10 years of experience in the banking sector in Mauritius.
He worked for HSBC (Mauritius) in the Finance department from 2006 till late 2010, with responsibilities in management and regulatory reporting. From 2011 to 2015 he was Business Manager to the CEO while also fulfilling the position of Acting CFO for Standard Bank DRC in 2015. After being Company Secretary for Standard Bank Ltd Mauritius, and prior to joining Barak, Kevin accepted the chairmanship of the Standard Bank Pension Fund.
He holds a BSc (Honours) in Economics and Finance from York University as well as an MSc in Management Science and Operational Research from Warwick University.
The Fund Managers
DEREK POSTMAExecutive
Shortly before joining Barak, Derek was a tax specialist at Stanlib where he was involved in the resolution of tax treatment of extraordinary transactions within the pension and life funds as well as in the Collective Investment Schemes.
Prior to this he was a tax consultant for Liberty Group after gaining significant accounting experience at Moore Stephens while auditing companies operating within the agricultural sector. Derek graduated from the University of South Africa with both a Bachelor and Honours degree in Accounting Sciences, majoring in accounting, tax, finance and auditing.
He is a qualified Chartered Accountant and member of The South African Institute of Chartered Accountants, and completed his public training with Moore Stephens.
MATTHEW ROBINSONFund Advisor
Matthew joined Barak’s origination team to specialise in West African commodity-backed transactions.
He completed a Politics, Philosophy and Economics (PPE) degree from Stellenbosch University, followed by a Business Administration Program (PDM) at Wits Business School. Thereafter, he spent five years at Investec Bank on their International Finance Team – whose activities consisted of portfolio management and business funding for exceptionally high net worth individuals and families.
CLAYTON TAYLORFund Advisor
After obtaining his BCom Accounting (Honours) degree from the University of Johannesburg, Clayton completed his articled training at PricewaterhouseCoopers and is a registered Chartered Accountant with SAICA.
Clayton fulfilled the role of commercial financial analyst with Akzo Nobel in London, returning to South Africa as a senior financial analyst with Mondelez International covering the FMCG sector in emerging markets in sub-Saharan Africa. His interest and experience in emerging markets facilitated his move to Export Trading Group, a Singapore-based emerging market agricultural supply chain company focussing on Africa. It was with ETG that Clayton received invaluable exposure to sub-Saharan African commercial transactions within the corporate finance sphere.
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The Fund Managers
ERIK VILJOENFund Advisor
Erik joined Barak in an origination capacity. With a career background heavily invested in this market segment, he brings a wealth of experience to the firm’s flagship fund strategy of structured trade and commodity finance.
Having completed his postgraduate studies in Agricultural Economics at the University of Stellenbosch, he joined a large African-focused investment bank.
Prior to joining the Barak team Erik was responsible for structured finance for Africa at a leading global trading house.
NAYEN KAVIAFund Advisor: Kenya
Nayen’s career spans more than ten years in corporate finance and private equity. He has executed a number of transactions across the FMCG, real estate, financial services and agri-business sectors.
Nayen embarked on his career in 2002 as a Summer Analyst with Deutsche Bank and then joined Deloitte, after which he set up a boutique advisory firm focused on sub-Saharan Africa. He is currently deeply involved with Africa-focused fund management and was also previously engaged on the deal team of a leading pan-African food and real estate private equity fund.
Nayen is an alumnus of the London Business School.
CELESTIN GAKUBAFund Advisor: Ivory Coast
Celestin has over 16 years of experience in Business Development Management, 12 of which were spent in Structured Trade Commodity Finance focusing on sub-Saharan African markets. He commenced his banking career with Standard Chartered Bank in London in 1999. Celestin then joined Eastern and Southern Trade and Development Bank in Nairobi-Kenya (widely known as PTA Bank), where he was a Trade Finance manager involved in the origination and structuring of some of the largest and most lucrative trade finance deals for the bank.
He is a graduate of Business Administration from Damelin College in South Africa and holds a Master’s degree (MA) in Business Law, from the University of Portsmouth in the United Kingdom.
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The Fund Managers
JUSTIN MURRAY Fund Advisor | Barak Asha Impact Fund
Justin has more than 10 years of experience in the African Agribusiness sector, from Organized Agriculture to the CEO of a Fund Manager specializing in small-holder farm development, Justin has extensive experience in initiating, developing, assessing and growing opportunities. As the CEO of Akwandze Agricultural Finance, Justin more than doubled available funding from Impact Focused funders and achieved record distributions to investors. Through his leadership, the deployment of these funds created over 27 000 economic inclusion opportunities for small-holder farmers and Community Based Joint Ventures which created over 1 000 new jobs and sustained approximately 3 800 existing agricultural jobs.
Justin completed his undergraduate studies at Rhodes University and received a MComm (Economics) from the University of Cape Town. He completed his MBA the Saïd Business School, University of Oxford.
YAW KETEKU Fund Advisor: Ghana
Yaw focuses on senior debt and mezzanine investment opportunities across Africa. Prior to joining Barak, Yaw was an Associate Partner at Vantage Capital in South Africa where he made several mezzanine investments in middle market companies. Prior to Vantage, he was an investment banker in the Global Energy and Project Finance Group at Credit Suisse in New York, involved in the origination and execution of M&A, debt, equity and leveraged finance transactions. Prior to that, he was a manager in the Corporate Finance Group at American Express in New York, where he was focused on pricing activities for the company’s corporate card and travel businesses.
Yaw holds an MBA from the Ross School of Business at the University of Michigan, and a BA in Economics from Dartmouth College.
JO-ANNE MARAIS Corporate Structuring Specialist
Jo-Anne is a Chartered Accountant with International corporate distressed restructuring & turnaround experience, both from an advisory and executory perspective. Jo-Anne is considered to be a Business Rescue industry expert, with more than 12 years of experience and is a frequent speaker at conferences and industry events. Jo-Anne joined Absa in October 2012 in the Investment Bank Credit Restructuring team as a specialist case manager, where she successfully restructured businesses in the retail, mining and financial institution sectors. In late 2014, Jo-Anne was approached to lead the Business Support team, which serviced clients in the Commercial, Agri, Wealth, CPF and Regional Africa Wholesale divisions.
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Investor Relations
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Investor Relations Team
GILES HEDLEYInvestor Relations Officer
Giles attended Hilton College in the Kwa-Zulu Natal midlands, matriculating in 2007. From 2008-09 he attended the University of San Diego. He returned to South Africa in mid-2009 to 2012 and obtained his Business Science Degree from the University of Cape Town, majoring in Finance. Thereafter he worked at Dimension Data as an Enterprise Client Manager. After a short stint at an Offshore Wealth Management Company where he gained exposure to global markets and experienced dealing with offshore fund portfolios, he joined Barak Fund Management and Riparian Commodities in November 2015 as Investor Relations Officer. Giles is busy working towards his CFA credentials.
LISA MAJMINExecutive Assistant to the CIO: Jean Craven
Lisa has over 8 years of experience working in the financial services industry, working mostly abroad. Her primary experience is within the hedge fund industry, working as a Quantitative Strategist for companies such as Gemstar Capital LLP, and Trium Capital in London, UK. She has also worked as a Portfolio Officer at the International Finance Corporation (Corporate Portfolio Unit) in Washington DC, USA. Her experience has covered numerous asset classes in both developed and emerging markets, the latter being more prevalent. She has a broad skill set which includes quantitative stock selection, macroeconomic stress testing, equity and loan pricing, as well as portfolio and risk management. She has a PhD in Finance from Imperial College Business School, an MSc, and BSc (hons) in Advanced Mathematics of Finance.
VISHLYN NAIDOO Head of Credit Risk
Prior to joining Barak Fund Management, Vishlyn was Head of the Infrastructure Credit team at Rand Merchant Bank, having been with the organisation for 6 years. Prior to that, Vishlyn was a Director in Investment Banking in the Corporate & Investment Banking Division of Standard Bank.
His 17 years’ experience in investment banking includes experience in Credit; Project Finance; Leveraged and Acquisition Finance; Structured Trade and Commodity Finance; and Black Economic Empowerment financing.
Vishlyn has worked in the USA and London and has been involved in many landmark deals on the African continent, in countries like Nigeria, Ghana, Mozambique and South Africa. Vishlyn is a CA (SA) with the South African Institute of Chartered Accountants as well as a CFA Charterholder with the CFA Institute.
The Fund
Barak Fund Exposure
24
South AfricaGhanaRepublic of CongoMauritiusZambiaKenyaBotswanaTanzaniaSeychellesDemocratic Republic of CongoOtherZimbabweMadagascarMaltaUgandaMalawiNetherlandsNamibiaMozambique
BARAK COUNTRY EXPOSURE
The countries most represented within the funds in our portfolio (with a maximum individual exposure of 20 percent, and 30 percent for South Africa) are as follows, but are not restricted to these exclusively:
The Fund
25
BARAK COMMODITY EXPOSURE
As per the Offering Memorandum, the flagship fund is prohibited from having an exposure exceeding 20 per cent with regard to any single commodity. The fund encompasses agricultural and food-related products, natural resource commodities, as well as non-agricultural general goods.
The main categories within the commodity spread for the funds in our portfolio are as follows (but is not restricted to these categories):
EquipmentOilMetalsCashFertiliserCoalLivestockFMCGPetroleum ProductsMineralsLogisticsPulsesVanillaRiceSoyaLocomotivesTextilesJuiceFruit & RaisinsSugarChemicalsCementNutsMaizeSesameVeg OilWheatSorghumSulphur
Bring diversity back to agriculture. That’s what made it work in the first place.
David R. Brower’
‘
Winner 2010 & 2012: Specialist Strategies Special Award 2011: Africa
Winner 2016: Best Sub-Saharan African Alternative Financer &Best Short-Term Commodity Fund 2016
Winner 2011:Africa Fund of the Year Nominated 2014: Africa Fund of the Year
Winner 2016: Africa Investment Fund of the Year 2016 -ACQ Global Awards 2016
Winner 2014 & 2015:Best Alternative Financier - Sub-Saharan Africa
Winner 2017: MEA Wealth & Money Management Awards: Leader in Fund & Investment Management Mauritius
Nominated 2014:Africa Investment Fund of the Year
Winner 2017:Africa Investment Fund of the YearACQ5 Global Awards 2017
Winner 2015: Best Trade Finance Fund – Barak STF Best African Alternative Financier
Prieur du Plessis - Barak Fund Management – Mauritius CIO & Portfolio Manager
Winner 2015: Best Alternative Financier- Best STF FundWinner 2017: Leader in Fund & Investment Management Africa
Winner 2017: Alternative Finance – Adviser of the Year MauritiusFinance Monthly M&A Awards
The Fund
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Awards
BARAK FUND MANAGEMENT AWARDS
IntroducingBarak Fund Management Ltd
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