At a glance
trividend finances and supports impact entrepreneurs with a vision to create social added value. It focuses on 3 target groups: creation of social employment, circular solutions and social innovation. It offers financing in the form of subordinated and convertible loans and participations.
Investor
The Flemish Regional Government provides max. 1/3 of the equity of trividend at the same (though concessionary) terms as other cooperative shareholders with the goal of investing long-term savings in a low-risk, highly liquid, and high-impact fund.
However, a crucial element in the model lies in the public guarantees provided by the Participatiemaatschappij Vlaanderen (PMV). Those guarantees reduce the risk profile of trividend as a fund, which helps attract additional investors.
Additionally, the Flemish Regional Government provides through SIFO (Sociaal Investeringsfonds) a co-financing instrument for impact investment deals with a strong focus on employment of people with a distance to the labour market. They also provide a grant to cover the operating costs of trividend.
Investment overview
Amount and instruments
- EUR 7 million in equity from cooperative shareholders.
- EUR 2 million in a back-to-back loan from SIFO with risk sharing.
- Operating grant by the Flemish Regional Government.
Structure and terms
- SIFO steps in as a co-funder when trividend actively invests.
- PMV Standard Guarantees covers max. 75% of the disbursed amount for max. 10 years.
- No annual management fees thanks to the Flemish Government grant.
Target return and performance
- Capital preservation as ambition.
Impact KPIs
- Development of a Theory of Change.
- Key metric at fund level: # created jobs for people with a distance to the labour market.
- Other impact metrics are reported per portfolio company.
- Publication of an annual impact report.
Catalytic role
SIFO acts as a co-financer and allows trividend to invest higher amounts. This tranche doesn’t have a direct catalytic effect.
In addition, trividend can enjoy up to 75% coverage of a PMV standard guarantee. This guarantee ensures that trividend can take higher risks and charge lower interest rates to investees. This guarantee has a catalytic role mobilizing additional capital.
The grant by the Flemish Government covers a substantial part of the operating costs of the fund. It allows trividend to be active in a segment of the market where tickets and returns are otherwise too small to cover the operating costs of a fund. As it is a pure grant it cannot be considered as catalytic capital.
This public-private partnership allows early-stage and high-risk funding to ventures that are not attractive enough for traditional VC investors.
Summary
| PMV | |
|---|---|
| Financial instrument | Guarantee |
| Disproportionate risk | OK |
| Concessionary return | OK |
| Third party investment | OK |
| Role | Sustaining |