About ShoreCap International, Ltd (SCI)

ShoreCap International, Ltd. is an international private equity company that invests in small business banks and regulated microfinance institutions in countries with developing and transitional economies. Founded in mid-2003 with $28.3 million in capital commitments, ShoreCap International seeks to support the growth of development finance institutions in Africa, Asia and, to a lesser extent, Eastern Europe. After four years of operations, the company now has investments in Afghanistan, Bangladesh, Cambodia, the Gambia, India, Kenya, Mongolia, Nigeria, Philippines, Tajikistan, and Uganda, totaling $13 million.  Expertise is directly available to investee institutions through ShoreCap Exchange, a not-for-profit technical assistance and capacity building affiliate which supports all ShoreCap investees.

The Sponsor: ShoreCap was created by ShoreBank Corporation, a $2.1 billion asset U.S. community development bank holding company with 30 years of experience in building sustainable development financial institutions. In addition to its own regulated banking operations, ShoreBank has been a leading provider of technical assistance and capacity building services to financial institutions in developing economies around the world. ShoreBank is an 8 percent investor in ShoreCap and runs the management company which oversees investment activities.

The Shareholders: Joining ShoreBank are thirteen other investors, including ABN AMRO Bank, the Asian Development Bank, BIO, the Calvert Group, CDC, the European Investment Bank, the Evslin Family Foundation, Finnfund, FMO, Ford Foundation, Gatsby Charitable Foundation, the International Finance Corporation, and Skoll Foundation. Together, these institutions have committed over $28 million to ShoreCap and elected 13 representatives to serve on the company's Board of Directors. Mary Houghton and Ron Grzywinski, ShoreBank's President and Chairman respectively, sit on the SCI Board along with Eugene Ludwig, former Vice Chairman of Deutsche Bank and U.S. Comptroller of the Currency, and Ernest Stern, who worked for the World Bank Group for 23 years, including positions as Chief Operating Officer, Chief Financial Officer, and Managing Director.

SCI's Investment Criteria

Type of Institution: ShoreCap invests in small business banks, regulated microfinance institutions, and other regulated non-bank financial service companies striving to profitably meet the credit needs of micro entrepreneurs and small businesses in underserved markets. NGOs seeking to transform their operations into for-profit, regulated institutions are also eligible for investment.

Size: ShoreCap typically invests between $500,000 and $2 million for an ownership position of 10-25 percent of a company. Investee institutions generally have $2-20 million in capital supporting total assets between $10-150 million.

Geography: Institutions located anywhere in Africa, Asia or the non first-round ascension countries of Eastern Europe are eligible for investment.

Profitability: Investees must have achieved a level of unsubsidized operating profit or have plans to do so within the next 12-18 months.

Local Management and Ownership: As a minority shareholder, ShoreCap seeks financial institutions with a strong, experienced management team and a committed set of local development-minded investors.

Exit Strategy: ShoreCap seeks to exit its investments within 5-7 years through such means as a share put option, recapitalization by local investors, sale of company to strategic buyers, or an initial public offering.

SCI's Typical Deal Structures

ShoreCap has great flexibility in tailoring its investment terms to meet the projected capital requirements of a growing financial institution. Alone or with co-investors, it generally seeks to invest an amount sufficient to capitalize the company for 3-5 years. In most cases this takes the form of common or preferred stock along with convertible debt tied to performance milestones and a minimum capital-asset ratio. ShoreCap International expects to play a significant role in the governance of its investments through a seat on each investee's Board of Directors. SCI generally invests in the local currency of the investee institution although it often looks for hedging mechanisms to protect against currency devaluation.

SHORECAP INTERNATIONAL, LTD                     2230 S. Michigan Avenue                     Suite 200                     Chicago, IL 60616                     http://shorecap.net                     paul_christensen@sbk.com                     davis_golding@sbk.com