Sev Vettivetpillai couldn't join us at the conference so his colleague, Geetha Tharmaratnam (Global Head of ESG) presented the work of Aureos Capital, focussing on small to medium-sized businesses and finding the 'missing middle'. Includes principles and case studies. Be sure to check out the other presentations, videos and audio recordings from the conference at www.tbnetwork.org/uknc11/media

1. Aureos Capital Sev Vettivetpillai, CEO/ CIO 1 Private Equity Creating Embedded Enduring Development Impact in the Emerging Markets Building the Impact Venture Ecosystem 19/05/2011

3. Aureos’ investments in small and medium sized enterprises span multiple crucial sectors. This sector diversification has compounded the development of the SME sector which represents an overwhelming proportion of enterprises in Emerging Economies, often providing the highest employment rates and significantly contributing to GDP output. By investing in these businesses, Aureos is working to fill the “Missing Middle” in the Emerging Markets.

4. The Aureos investment team is highly experienced in developed markets and emerging markets, possessing a diverse range of skills, backgrounds and nationalities. The team is based in 29 offices globally. Experience has shown that investee companies are attracted to Aureos’ hands-on support, value addition and access to its global network of sector specialists, investment/operating partners, and commercial relationships.

5. Signatory to the UN PRI, embedding strong Environmental, Social and Governance standards. We feel that the Aureos platform has become a trusted brand primarily based on our long term vision to build a world class small and medium-sized focused PE firm, the motivation of the global team of partners and the blue chip governance model that we have adopted

6. 3 The global focus on small to medium-sized businesses In many markets, Aureos is one of very few players with a concentration on deals covering small to medium-sized businesses. The firm is definitely unique as a provider of such capital on a global scale Underserved segment Specialized experience Aureos has had nearly two decades of specialized expertise serving small and medium-sized businesses, in a hands-on engagement model which positions us favourably in deal sourcing and execution as we have come to be seen as a preferred partner The underlying growth in emerging markets where we invest is partially fuelled by the emergence of a new entrepreneurial class and an increasing number of skilled management teams looking to scale up and professionalize their businesses Growing class of emerging entrepreneurs 3

8. Empowerment of management

10. Liquidity risk

11. Country risk

12. Business risk

15. Adhere to a culture of entrepreneurialism, with which we engage our investee companiesSustainable investing An investor initiative in partnership with UNEP FI and the UN Global Compact 4

17. The funding needs of these businesses differ by size of company and by stage of development of the enterprises5

18. The challenging barriers to growth when developing SMEs Scale Poor management discipline Management capability Lack of governance, systems and processes Difficulty accessing capital markets Access to markets Access to growth capital Time

20. Directly employs 1,500 Kenyans and indirectly supports 150,000 Kenyans in the value chain including farmers, suppliers, retailers, transporters, distributors. Further employment of 10,000 people in Tanzania and Uganda through regional procurement, processing and distribution networks

21. Milk sourced from over 100,000 farmers in Kenya, 95% of whom are small scale producers

22. Unique dairy model within Africa – successful implementation of sourcing milk on scale from small farmers, well developed cold chain with rural collection points and on-site testing for quality

23. Success factors: strong management team, utilisation of technology, defined expansion strategy, constant innovation to manage supply and demand volatility

25. Sustainable Certification: UN Global Compact, CEO Water mandate, the tea factories/ plantations are certified with Global GAP (Good Agricultural Practices in global markets), the rubber plantations are accredited by the Forest Stewardship Council (FSC).

26. Unique “Firstlight’ initiative integrates sustainable sourcing with CSR programmes for Sri Lanka’s rubber smallholders DPL smallholder programme “Firstlight” is empowering over 3,000 small-scale rubber farmers by purchasing at regular and fair market price, providing education, technical help thereby them to tap into their potential and building capacities for their communities

27. First company to produce certified fair trade gloves