The investment objective of the Global Horizon Fund is to achieve competitive returns through a diversified portfolio of direct equity investments in small and medium-sized enterprises in developing countries around the world.
Small and medium-size enterprises are a primary source of innovation, jobs and wealth creation in the United States and some other more developed economies. Such enterprises typically acquire their initial seed money as private equity, including venture capital, based on high risk and high reward. This has developed into an institutionalized form of financing, until recently, only available in mature economies characterized by established capital markets, rule of law and openness to foreign investment. Private equity financing has slowly spread to select developing countries like China, Korea, India, South Africa, Brazil, Romania, Slovenia and others. A major boost for the global goal of economic development lies in fostering the culture of foreign direct investment more widely, to trigger private equity financing in developing countries in order to provide entrepreneurs and young enterprises in these countries with access to needed capital.
The GP, through its careful selection of experienced In Country Funds and Local Managers, will strive to identify worthy and promising investment opportunities in early stage and emerging growth companies, buy-outs and privatizations in a variety of pre-designated developing countries. It is the intention of the GP that the very survival and success of these investments will demonstrate the viability of targeted private equity investments more broadly in developing countries, fulfill the goal of economic and social development itself and, through creative public-private exit strategies such as an “exchange fund,” achieve reasonable profits for the Global Horizon Fund investors at least the equal of U.S. private equity and venture capital industry standards, although no assurances can be made that such profits shall be achieved.
The sponsors of the Global Horizon Fund regard a partnership among local investment professionals, managers with a proven track record in international and/or venture finance and public agencies such as the United Nations and regional development banks as central in promoting the creation of an environment for private equity investments in developing countries. In choosing each of the In Country Funds, the GP will seek Local Managers with the right blend of Western experience and non-western insights. Each of the In Country Funds will be run by Local Managers based in the region and/or country targeted for investment in order to leverage local relationships, facilitate identification of opportunities and maximize deal flow. The GP believes that insight, experience and management of the Local Managers will be a key factor to the success of the Funds. Each of the In Country Funds will follow uniform protocols for assessing risk, conducting due diligence, measuring valuations and other aspects of the investment process. These protocols will be established by the GP and will be incorporated into the In Country Funds through covenants in the underlying fund and investment management documents as well as through appropriate representation on the board or investment committees of the In Country Funds.