presentation by humbert garreau de labarre

12 avril 2023

MICROFINANCE

LA COMPAGNIE FINANCIÈREEDMOND DE ROTHSCHILD BANQUE

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La Compagnie Financière Edmond de Rothschild Banque

LCF ROTHSCHILD GROUP : AN INTERNATIONAL FAMILY-OWNED INDEPENDANT GROUP

Founded in 1953 by Baron Edmond de Rothschild and now chaired by his son, Baron Benjamin de Rothschild.

Owned by the Rothschild Family, an international group headquartered in

Paris : for institutional money management.

Geneva : for private banking.

Assets under management of $ 80 billions.

Staff of 2 200.More than 100 portfolio managers (both institutional and private).30 branches.

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SHAREHOLDERS

Compagnie FinancièreSaint-Honoré

(Paris)

LA COMPAGNIE FINANCIÈRE HOLDING BENJAMIN ET EDMOND

DE ROTHSCHILD GENÈVE

La Compagnie Financière Edmond de Rothschild

Banque

• Chairman of the Supervisory Board : Baron Benjamin de Rothschild• CEO : Michel Cicurel

Caisse de Dépôt et Placement du

Québec

Banque PrivéeEdmond de Rothschild

(Genève)

Cogifrance(Paris)

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SUBSIDIARIES AND EXPERTISES

Edmond de RothschildAsset Management

Edmond de RothschildMulti Management

Edmond de Rothschild Corporate Finance

Edmond de Rothschild Private Equity PartnersInternational

Operations(China, Italy, Israel)

Edmond de Rothschild Financial Services

Assurances et ConseilsSaint Honoré

Private Banking, wealth management Private banking

Equity, fixed-income and diversified management

Structured Asset Management

Diversified and alternative Multi-management

Private equity

Mergers & Acquisitions

Insurance Brokerage

Asset Management Private bankingPrivate Equity

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TRENDS IN ASSETS UNDER MANAGEMENT

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MORNINGSTAR® RANKINGS

Regularly among the top 5Since 2002, La Compagnie Financière Edmond de Rothschild has systematically ranked among the top 5 European asset managers according to Global Investor / Morningstar

2005This leadership position has once again been confirmed by the 2005 rankings, naming us 5th best manager for equity funds, ahead of Schroders, Axa, Merrill Lynch, HSBC, Crédit Agricole…

45

Fund manager No. of funds ranked Average1 LCF Rothschild 40 3.35

2 UBS 113 3.253 CDC IXIS 41 3.22

4 Aviva 3.215 Schroder 66 3.20

6 50 3.19

BEST EQUITY MANAGER IN EUROPE 2003

T Rowe Price

Fund manager No. of funds ranked Average

1 68 3.74

2 American Century 95 3.65

3 Baillie Gifford 54 3.64

4 Threadneedle 94 3.52

5 LCF Rothschild 60 3.49

BEST TRANSATLANTIC FUND MANAGER 2002

Global Investor / Morningstar

75

45

Fund manager No. of funds ranked Average

2 LCF Rothschild 39 3.31

1 Storebrand 35 3.37

3 State Street 42 3.26

4 Robur 3.255 Barclay’s 45 3.24

BEST EQUITY MANAGER IN EUROPE 2004

40

12 avril 2023

Microfinance : a New Double Bottom Line Asset

Class

LA COMPAGNIE FINANCIÈREEDMOND DE ROTHSCHILD BANQUE

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The economically active poor – a huge need

2 billion people living under poverty threshold

500 million micro-enterprises

Informal rural & urban areas of emerging markets

A very dynamic, grassroots economic sector

USD 500 credit need per micro-enterprise per year

Need for credit, but also savings, insurance, pension, transfers

Demand is still largely unmet - a vast untapped potential

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Microfinance – a truly commercial approach

No need for charity but flexible provision of adapted financial services

No contradiction with social objectives

Lasting social impact through profitability

Greater outreach through commercialisation

Acceleration of growth through K markets access

Microfinance is a new segment of global finance

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Microfinance – investment impacts

Strong link to family economics

Stimulating grassroots entrepreneurship

Growth of micro and small businesses, job creation

Raising family living standards

Reinforcing self-esteem

Community & financial infrastructures development

Dynamic inter-generational virtuous cycles

➔ A very efficient way to alleviate poverty

➔ 2005, the UN year of Microfinance

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Micro-banks – Local financial services providers

Microfinance institutions as specialized financial intermediaries

Different legal formats (banks, NBFC, cooperatives, NGOs, etc.)

Increasingly regulated entities (65% of BlueOrchard clients)

Know intimately the sector in which they operate

Created financial products adapted to target segment

Developed specific delivery channels (ensuring proximity)

Included sophisticated IT developments (ATMs, palm pilots, etc.)

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Micro-banks : strong track record of leaders

Solid profitability (ROE in the 20s is usual)

Very fast growth (average DMCF clients = 40% per year over last 3 years

Low portfolio at risk (average default rates of 3%), excellent diversification

Products and services range adapted to client need

Low D/E ratios, high solvency

Very good MIS systems and reporting capabilities

Solid governance and high professionalism of boards and management

Access to many commercial sources, no subsidies at all

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Microfinance – A nascent global financial segment

Increased attention and specific legislation by regulators

Audits by superintendents of banks

External annual audits by recognized local auditors

Ratings by top rating agencies and specialized rating agencies

Creation of credit bureaus

Formation of local intermediaries’ associations

Development of international microfinance networks

Multiplication of investment funds both in debt and equity

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Importance of global Microfinance funds

Provide diversification of funding sources to MFI

Provide fast and flexible access to funding

Complement the domestic capital offering

Serve as catalyst and demonstration effect for local capital

Maintain demanding reporting standards

Introduce Microfinance practitioners to new investors’ segment

Provide opportunity to investors of doing well by doing good

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Microfinance debt – a new asset class ?

Attractive to both institutional and individual investors

Unique combination of social and financial returns within same product

Very high and effective social impact

Appealing financial risk – return profile

Limited credit risk

High insulation of microfinance sector from macroeconomic shocks

Low correlation with other asset classes in portfolio

Attractive fast growing industry

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International capital markets and BlueOrchard

Microfinance market is huge and needs are largely unmet. The only long term source of funding able to meet global demand is the capital markets. Donor money and public subsidies will not be sufficient.

While domestic capital markets should become the main driver of growth of local microfinance, international capital markets do play an important role (complementary offering, diversification, international awareness, image building, catalytic effect)

BlueOrchard mission is to bridge the gap between Microfinance institutions and international capital markets by creating and developing financial investment products meeting the needs and requirements of both microfinance institutions and commercial investors

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BlueOrchard Finance

Staff of 10 finance professionals with presence in Geneva, London and New-York; A stable and committed shareholders’ base and board

Total current assets under management of $300 million invested in over 23 countries in more than 60 microfinance institutions.

Five investment products and partnerships with leading financial institutions, including La Compagnie Financière Edmond de Rothschild Banque

A robust investment track-record : over 350 loans made in more than five years, without any defaults to date

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Saint-Honoré Microfinance :an investment socially useful and

profitable

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SAINT-HONORÉ MICROFINANCE’S STRENGTHS

An opportunity to participate in the development of poorer regions by encouraging entrepreneurship

A stable investment thanks to high portfolio diversification

Microfinance institutions and investment partnerships included in the fund are rigorously selected

High quality fund management performed by reputable professionals

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INVESTMENT STRATEGY

Saint-Honoré Microfinance aims to develop micro-entrepreneurship, via the development of microcredit and microbanking establishments.

Saint-Honoré Microfinance, a SICAV-type fund, is accordingly putting forth a clear and contained investment strategy.

Saint-Honoré Microfinance provides funding to local specialized institutions in charge of transferring and redistributing funds to microbanks (MFIs) and subsequently to microbusinesses.

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COMPLEMENTARY KNOWHOW

BlueOrchard Finance Edmond de Rothschild Asset Management (1)

The Saint-Honoré Microfinance SICAV is managed jointly by

Loan and stakeholding management

• Fund and investment company financing

• Cooperative and small institution network financing

• Investing in shares of local and regional funds

Financial fund management

• Global asset allocation

• Cash and liquidity management

(1) Edmond de Rothschild Asset Management, subsidiary of La Compagnie Financière Edmond de Rothschild.

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SELECTING MICROFINANCE INSTITUTIONS

Selecting microfinance institutions is accomplished through a rigorous and consistent process

Quantitative & qualitative criteria analysis

• Most recent audited accounts• Portfolio review (number of loans outstanding, maturities, etc…) • Cost structure • Review of possible lags in loan redemption• Data double-checked against rating agency information

On-site Evaluations• To contact microfinance

institutions, meet their boards and managers, and review capital allocation

• To contact micro-entrepreneurs who are MFI customers, and check on the consistency of services offered

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PORTFOLIO DISTRIBUTION

• 60 % debt, via the funding of local and regional microfinance institutions the geographical location of which is determined by qualitative, criteria-based, selection decisions.

• 20 % to 30 % maximum Dexia Micro-Credit Fund shares and possibly shares of another microfinance fund

Dexia Micro-Credit Fund is a Luxemburg investment company (SICAV) set up seven years ago. The fund is diversified and active in 20 countries with 50 client MFIs. Its investments are in sound microfinance institutions, and provide investors with risk diversification.

• 10% cash at most (exceedable however during investment period).

Cash

Dexia Micro Credit Fund

MFI debt

Saint-Honoré Microfinance’s asset allocation template

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FUND FEATURES

Fund type : Luxemburg Part II investment company (SICAV)

Composition : Loans

Expected return : 3 % to 4 %

Valuation : monthly

Exit rule : quarterly (January, April, October, December) with one month’s notice

Initial unit price : 5 000 €

Entry fee : 2 % maximum

Exit fee : 0 %

Management fee : 3 %

Assets currency : Euro

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Avertissement / Legal information

The data, comments and analyses in this bulletin reflect the opinion of the LCF Rothschild Group with respect to the markets and their trends, regulation and tax issues, on the basis of its own expertise, economic analyses and information currently known to it. However, they shall not under any circumstances be construed as comprising any sort of undertaking or guarantee whatsoever on the part of the Group.

In no event shall the LCF Rothschild Group assume responsibility for any decision to invest, to disinvest or to maintain a position on the basis of these comments or analyses.

It is the responsibility of each and every investor to obtain the various regulatory prospectuses for each fund or financial product prior to making any investment and to analyse the risk incurred and establish his or her own opinion, independent of the LCF Rothschild Group, and where necessary, to take specialist advice regarding such questions, and especially in order to determine the relevance of such investment to his or her own financial situation.

Past performance and volatility is no guide to the future. The value of investments may fall and rise and performance is not constant over time.

The prospectuses of the funds mentioned are available upon request and may be found on our websites (www.lcf-rothschild.fr or www.edrfund.com).

presentation by humbert garreau de labarre

Economy & Finance

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