Community Development Venture Capital Alliance

SEAF-Macedonia LLC
Main Offices: Metropolit Teodosij Gologanov 28
1000 Skopje, Macedonia
Website: www.seaf.com.mk
Email: office@seaf.com.mk

Fund Manager: Small Enterprise Assistance Funds (SEAF)

Key Personnel: Vladimir Pesevski, Director General

Established: 1998

Total Committed Capital: US $13 million

Amount Invested: US $6.7 million (52%)

Shareholders:
European Bank for Reconstruction and Development (EBRD)
Deutsche Investitions - und Entwicklungsgesellschaft mbH (DEG), Germany
Small Enterprise Assistance Funds (SEAF), via grant from the United States Agency for International Development (USAID)
International Finance Corporation (IFC)

Geographic Focus: Macedonia

Background
SEAF-Macedonia LLC is a small venture capital fund based out of Washington DC, which conducts its operations in the Republic of Macedonia. The mission of SEAF-Macedonia is to make prudent investments in small and medium-sized enterprises (SMEs) that are based in the Republic of Macedonia. Throughout the difficult time of the conflict in Kosovo, SEAF-Macedonia has continued to pursue investment opportunities and to support its existing portfolio of companies. Despite the regional ethnic tensions in 2001, many of SEAF's portfolio companies continue to perform well. With economic renewal underway, SEAF is well positioned to take advantage of the high growth opportunities in the market. 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
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. Consistent with the foregoing, SEAF will also seek to promote trade on behalf of investees in Macedonia through its investees and contacts especially in its other Funds, as well as through its US headquarters.

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. 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. The fund invests in SMEs, targeting investee companies that employ between 5 and 100 people and have a turnover of US $150,000 up to US $2 million. The investments are in the range US $200,000 - $800,000 per investment and SEAF usually takes between 20 and 49% ownership position. The Fund has no stage or co-investment preferences.