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Portland Fund III to deploy one-third of funds to women-led companies

Portland Private Equity LP, an investment firm controlled by Michael Lee-Chin, is promising to target women for financing through the new equity fund it’s in the process of seeding.

Portland Caribbean Fund III, otherwise called PCF III or Fund III, aims to raise US$350 million from international backers for investment in regional businesses.

“As a 2X Flagship Fund, PCF III’s investment strategy will focus on gender throughout the investment continuum, and at least 30 per cent of the fund’s portfolio will be 2X-aligned,” said Toni-Tanille Kerr, a member of Portland’s investment team and works closely with Clarien Bank and other portfolio companies.

2X Flagship Funds are part of an international initiative called the 2X Challenge that aims to mobilise financing for women businesses, with the backing of rich G7 countries, an elite group comprising the United States, Canada, Japan, France, Germany, United Kingdom and Italy.

The 2X Challenge was launched at the Group of Seven Summit in 2018, with an initial target of US$3 billion to be deployed in three years. That target was exceeded. The funds invested by development partners within the period amounted to US$6.9 billion, with co-investments pushing the total to US$11.4 billion. The second round achieved investments of US$16.3 billion, which, reportedly, benefited 473 businesses across global emerging market regions.

The total investments under the 2X Challenge since its inception is US$27.7 billion.

Portland’s Fund III is being created as Fund II move towards the end of its life cycle, likely in 2024.

Kerr disclosed PCF III’s plans for a near one-third focus on women entrepreneurs at the launch of the SheTrades Caribbean Hub on Tuesday, a trading platform that Caribbean Development Bank, CDB, will be building out over the next two years in partnership with the International Trade Centre. CDB is an investor in PCF II.

Regarding PCF III: “Gender and diversity considerations will be included in the evaluation of all possible investments, with a target-based approach to facilitate measurement and monitoring,” Kerr told the Financial Gleaner.

“The team’s active management will result in gender being embedded and enhanced in each business’ growth strategy. PCF III will continue the operations-oriented, pragmatic approach used in our prior funds while contributing to the SDGs, particularly those related to gender equality, climate change and job creation,” she said, following the SheTrades event.

SDGs refer to the UN Sustainable Development Goals that countries around the globe have committed to achieve by 2030. The SheTrades initiative developed by International Trade Centre also aligned to the SDGs. The agency is providing sponsorship of US$19,000 for the development of the SheTrades Caribbean Hub, while CDB is investing US$450,000 in its creation. The buildout will take two years, the bank said.

Kerr noted that the investments made by Caribbean Fund II, which was seeded at US$200 million, facilitated the creation of 26,000 high-quality jobs and the elimination of 445,000 tonnes of carbon emissions within the region.

Portland Caribbean Fund III will similarly finance businesses in the Caribbean, Colombia and Central America. Portland says in selecting the ventures and firms to invest in, it will be looking for “clear evidence of a business in an attractive market sector that is supported by growing demand, strong cash flows, and significant revenues” and talented management.

The Inter-American Development Bank is considering investing US$10 million in Fund III, while the European Investment Bank has committed up to 10 per cent financing, capped at US$35 million.

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