New US$350m Portland Caribbean Fund to focus on social investing
Portland Private Equity, PPE, is aiming for US$350 million to finance a series of regional investments under Portland Caribbean Fund III that impact society and the environment, filings show.
It would become one of the largest funds in the region operated by PPE, a firm controlled by Jamaican-Canadian businessman Michael Lee-Chin.
PPE has already poured a combined US$405 million into regional investments through Caribbean Fund I and II. The third iteration, Fund III, will maintain the investment strategy of backing high-quality, scalable indigenous businesses. It is expected to be operational by May, according to PPE Managing Partner Robert Almeida.
Fund III’s “geographical mandate” covers the Caribbean Basin – inclusive of the Caribbean, Colombia, and Central America, Portland said on its website.
Portland Caribbean Fund III is a special limited partnership registered in Luxembourg. It will focus on environmental and social issues across its entire portfolio, but does not have as its objective sustainable investment, Portland explained on its website.
Since the coronavirus pandemic, a number of funds globally have focused on investments that impact society, the environment and governance, in what is termed ESG investing or green investing, which focusses on things like green or clean energy and medical breakthroughs. The rationale, in part, rests on unlocking greater value for society rather than focusing on accounting profit and loss.
PPE says on its website that Fund III will focus on the goals of gender equality, reduced inequalities, decent work, quality jobs and climate action.
“Portland Caribbean Fund III is committed to making social investments by providing funding for gender-responsive businesses,” said PPE. “Additionally, PCF III aims to contribute to the United Nations’ Sustainable Development Goals,” it said.
The fund will make privately-negotiated equity and quasi-equity investments to support the expansion of eight to 10 small businesses in the region, according to disclosures by the European Investment Bank, EIB, which is one of the backers of the fund.
The EIB will provide 10 per cent of the targeted funds.
“The project consists of a participation of up to US$35 million into Portland Caribbean Fund III, a new closed-end private equity fund with a target size of US$350 million, targeting companies mainly in the Caribbean region with a multi-sector approach,” the bank said in its filings.
The emergence of a third Caribbean Fund was not unexpected, following indications by another PPE-managed fund that it was gearing for new investments.
That fund, known as Portland JSX Limited, operated as a co-investor in Portland Caribbean Fund II, a 10-year closed-end fund, now entering into its final stages of life.
Portland JSX is expected to continue aligning itself with Fund III, but its participation requires board approval, PPE partner Ricardo Hutchinson said. Additionally, other partners in Fund II are also expected to take positions in Fund III, he said.
PCF II, which raised some US$180 million for investing, grew the value of its portfolio to US$250 million up to mid-2022, PPE, which manages the fund.
PCF II has taken positions in multiple businesses, including Outsourcing Management Limited, which trades as itel; Productive Business Solutions Limited, a regional tech services firm; Facey Telecom which offers card services; Merqueo, which operates online groceries in Latin America; Diverze Assets Inc, the holding company for tour entity Chukka Caribbean; CVBI, which includes the telecoms Liberty Latin America; Grupo IGA, which includes the large Colombian restaurant operation called Andres; and Clarien Group Limited, a provider of financial services.
Its forerunner, Caribbean Fund I, raised some US$225 million. Its investments included Advantage General Insurance Company; telecommunication services providers Columbus International; construction company Moya; the beachfront development Las Olas; energy provider InterEnergy Holdings; and a a soya bean company called World Food.