responsAbility opens up smallholder finance for investment

Fair trade: an exciting investment theme

Zurich, 1 July 2014 – Fairly traded products are growing in popularity. In 2013, sales of Fairtrade International-certified products in Switzerland grew by 15%, while worldwide their consumption rose by 20% to over USD 65 billion. Today, some 1.3 million smallholder farmers in 70 countries profit from fair trade. They, along with cooperatives, traders and importers, require working capital for their economic activities. The Swiss asset manager responsAbility Investments AG has been successfully mobilising private funds towards this purpose for nearly ten years.

Across the globe, a billion people are engaged in agriculture. That amounts to a third of the world’s entire working population. Their efforts are matched by a continually growing worldwide demand for food: experts1 predict that by 2050 this demand will increase by at least 60% as compared with today’s levels. If smallholder farmers organised in small- and medium-sized farming organisations are to seize the opportunities arising from this growth in demand, they will require an additional USD 13 billion in net investments from private investors.

For the last ten years, the Swiss asset manager responsAbility Investments AG has specialized in this development-related sector of emerging economies, which has enabled private investors to help satisfy some of the need for working capital. Furthermore, since 2011 it has been operating an investment fund especially geared towards sustainable agriculture that is licensed for public distribution in Switzerland. Demand on the part of investors has almost doubled since 2012 and continues to rise rapidly, in hand with the need for financing in emerging markets and developing economies. As of today, responsAbility has invested a total of USD 88 million in sustainable agriculture through various funds and has 23 employees engaged entirely to this area. They work with about 100 enterprises in 39 countries, which together produce or market 30 agricultural commodities as diverse as coffee, cocoa, quinoa and cashew nuts.

The vast majority of investees, many of them agricultural cooperatives, require pre-export financing with relatively short terms to maturity. They use this to purchase crops from smallholder farmers at or before the harvest, thereby bridging the period until payment by the importer has been received. Cooperatives usually pay better prices than other intermediaries, and use – if available – premiums from Fairtrade-certified sales for direct payments to smallholder farmers, technical support or other social projects. In addition, many smallholder farmer organisations seek to develop processing capacities so that they can add value to their products. As this requires building factories or purchasing processing equipment, long-term financing – which responsAbility also provides – is often needed.

Klaus Tischhauser, co-founder and CEO of responsAbility, explains: “Over the last few years we have seen steep growth in investments into smallholder finance. Investors appreciate the ability to obtain stable returns in the current low-interest-rate environment while simultaneously contributing to economic development in emerging markets and developing economies. All of this makes fair trade an exciting investment theme.”

Contact

responsAbility Investments AG 
Ulli Janett, Media Relations
Telephone: +41 44 250 67 15
E-mail: ulli.janett [at] responsAbility.com

About responsAbility
responsAbility Investments AG is one of the world’s leading independent asset managers specializing in development-related sectors of emerging economies. They comprise the areas of finance, agriculture, energy, healthcare and education. responsAbility provides debt and equity financing to non-listed companies with business models that target the lower-income section of the population and can thus drive economic growth and social progress. responsAbility offers professionally-managed investment solutions to both institutional and private investors.

Founded in 2003, responsAbility currently has more than USD 2.0 billion of assets under management, which are invested in over 470 companies in more than 80 countries. responsAbility is headquartered in Zurich and has local offices in Paris, Lima, Mumbai and Nairobi. Its shareholders include a broad range of reputable institutions in the Swiss financial market as well as its own employees. responsAbility is registered with the Swiss Financial Market Supervisory Authority FINMA.

Legal Disclaimer

This document was produced by responsAbility Investments AG (hereinafter “responsAbility”). The information contained in this document (hereinafter “information”) is based on sources considered to be reliable, but its accuracy and completeness are not guaranteed. The information is subject to change at any time and without obligation to notify the investors. Unless otherwise indicated, all figures are unaudited and are not guaranteed. Any action derived from this information is always at the investors’ own risk. This document is for information purposes only, and is not an official confirmation of terms. The value of an investment and any income from it are not guaranteed. Changes in the assumptions may have a substantial impact on the return. Past performance is no indication of current or future performance. The performance data does not take account of commission charged on issue and redemption of the units. This information is not intended as an offer or a recommendation or an invitation to purchase or sell financial instruments or financial services and does not release the recipient from making his/her own assessment. In particular, the recipient is advised to assess the information, with the assistance of an advisor if necessary, with regard to its compatibility with his/her own circumstances in view of any legal, regulatory, tax, and other implications. The fund targets investments that are associated with a higher risk than investments in more developed markets or countries. Emerging markets exist in countries that display at least one of the following features: a degree of political instability; relatively unpredictable trends in growth and financial market development; a financial market that is still at a developing stage; a weak economy. As a rule, investments in emerging markets are exposed to greater risks. These include political and economic risks and risks relating, for example, to soundness, exchange rates, market liquidity, legal regulations, settlement, markets, shareholders, and creditors. Investors should be willing and financially able to accept the risk features of the investments described in these documents. Commodity investments are prone to wider fluctuations in value than conventional investments, and may entail additional investment risks. responsAbility and/or the members of its board of directors and employees may have a participation in the investment fund (or any related investments) and may add to or sell these positions from time to time. Additionally, the members of the board of directors and employees of responsAbility may serve as members of boards of directors of the investments in which the investment fund is invested. This document is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under applicable law. The financial product specified in this document is not licensed for distribution in the United States of America. As a result, it may not be offered, sold, or delivered there. Neither the present document nor copies thereof shall be sent or taken to the United States of America, or issued in the US or to a US person (in the terms of Regulation S of the United States Securities Act of 1933, in the respective current version). The responsAbility Fair Trade Fund is licensed as an investment fund under Swiss law for distribution in Switzerland as a contractual investment fund of the type “Other funds for alternative investments” associated with a particular risk. The prospectus, the management regulations, and the annual and semiannual reports may be obtained free of charge from Credit Suisse Funds AG in Zurich, Credit Suisse AG in Zurich, and from any distribution partner.
 

Copyright © 2021 responsAbility Investments AG. All rights reserved.