Community Development Venture Capital Alliance

SEAF Croatia LLC
Main Offices: Head Office: Britanski trg 5/11
10 000 Zagreb, Croatia
Website: www.seaf.hr/english
Email: info@seaf.hr

Fund Manager: Small Enterprise Assistance Funds (SEAF)

Key Personnel: Jonathan Cooper, Director General

Established: 1997

Total Committed Capital: US $10.4 million

Amount Invested: US $4.4 million (53%)

Shareholders:
SEAF Trans-Balkan SME Equity Fund LLC
The Small Enterprise Assistance Funds (SEAF), via grant from the United States Agency for International Development (USAID)

Geographic Focus: Croatia

Background
SEAF-Croatia was established in 1997 in order to provide equity capital and technical assistance to private Croatian small and medium-sized enterprises (SMEs). In October 1999, SEAF-Croatia was re-established as SEAF-Croatia LLC, an American limited liability company. Because of the relatively modest capitalization of SEAF-Croatia, as well as other SEAF funds in the Balkans region, the SEAF Trans-Balkan SME Equity Fund (TBF) was established in June 2000 to serve as an umbrella fund. TBF purchased an equity share in SEAF-Croatia LLC in order to increase SEAF-Croatia's capitalization, so that it could provide additional equity financing to small and medium-sized enterprises (SMEs) in Croatia. The company's management team is comprised of investment officers and analysts committed to fulfilling SEAF's mandate to promote sustainable economic development and encourage entrepreneurship in emerging free-market economies. SEAF-Croatia maintains headquarters in Zagreb, Croatia and an additional representative office located in Osijek, Croatia.

Investments are made in combination with a management training and technical assistance component in order to enhance the business performance of the Fund's investments and to help meet its developmental objectives. The Fund actively assists its portfolio companies in implementing appropriate improvements in management techniques and practices, especially relating to financial control, cost accounting, quality control, and marketing. In addition, the Fund Manager's investment officers are actively engaged in implementing business strategy and in following-up with advice rendered by outside experts. Business support programs are sponsored not only by the Fund, but also by other international and local agencies.

Social Mission
The objectives of the Fund are those of the SEAF Trans-Balkan SME Equity Fund LLC: By providing affordable financing to private sector SMEs in underserved markets, the Fund seeks to build the capacity of SMEs to expand production, access new technology, improve competitiveness, reach wider markets, increase profits, and achieve long-term commercial sustainability. By supplementing investments with technical assistance, SEAF aims to help develop business and management skills, improve corporate governance and transparency, and formalize legal structures, business structures, and tax reporting. The development of a vibrant and sustainable SME sector will help to generate new employment, export revenues, and government tax revenues; stimulate economic growth; promote free markets; improve social welfare; and contribute to political stability in developing countries. The Fund also seeks to provide examples of successful private enterprises to entrepreneurs and investors, help SMEs establish new customer and banking relationships with the formal banking sector, create a culture of equity investment, institutionalize investment methods and structures, and help to develop the country's overall financial sector.

Investment Information
The Fund invests in enterprises engaged in a broad diversity of sectors, with a special emphasis on companies that are export-oriented and those with strong growth prospects. Historically, the fund has invested in companies involved in agribusiness, production, information technology and business services. The Fund will not invest in enterprises engaged in the following activities: banking, insurance, and financial services; speculative investment activities such as real estate or commodities trading; production or sale of tobacco products or hard alcohol; arms manufacturing or other military-related activities; operation of casinos or other gambling-related activities; operation of abortion clinics; or activities harmful to the environment. The Fund also complies with IFC environmental, health, safety, and social policies, such as the following: The Fund will not make investments in entities engaged in forced labor, harmful child labor, trade in certain regulated wildlife products, production of ozone depleting substances or products containing PCBs, drift net fishing, projects affecting indigenous peoples or containing large resettlement components, and projects that pose serious health risks. The Fund adheres to applicable environmental, indigenous people, involuntary resettlement, cultural property protection, occupational health and safety requirements, and child labor and forced labor laws and regulations of the country in which investments are made. The Fund appoints an Environmental Manager, implements an Environmental Management System, and furnishes an Environmental Performance Report.

Investments generally range between a minimum of US $100,000 to US $500,000, with a maximum investment exposure of US $1,000,000. SEAF-Croatia typically holds a significant minority equity position in each portfolio company, generally between 25% and 49%. The fund will invest in businesses at all stages of development. SEAF-Croatia maintains active relationships with other investment funds, and, therefore, has the capability to structure equity financing for companies that require capital investments in excess of US $1,000,000. SEAF-Croatia works closely with the SEAF Central and Eastern Europe Growth Fund LLC, which has US $16,300,000 in total committed capital, and is capable of making individual investments ranging from US $1,000,000 to US $3,000,000 in size. SEAF-Croatia also syndicates larger deals with outside equity investors, including the Soros Fund in Croatia, which is capable of making investments ranging in size between US $3,000,000 and US $20,000,000.