25 Jan Financial Sector Relevance and Resilience in Trinidad and Tobago
Following the amendment of the Insurance Act in 2020, in August last year, the Central Bank of Trinidad and Tobago took an important step in the modernisation of Trinidad and Tobago’s financial sector by confirming that the SEAF Caribbean SME Growth Investments Ltd (a St Lucia private mutual fund managed by SEAF Caribbean Management LLC, a wholly-owned subsidiary of Small Enterprise Assistance Funds (“SEAF” (www.seaf.com)) satisfies the requirements of a security in which pension plans could invest.
This is a welcome response to the calls by Trinidad and Tobago financial sector to unlock the considerable investment potential of pension plans to expand economic growth, increase employment and boost exports by enabling them to invest in private equity instruments.
As the country emerges from the Covid-19 pandemic, companies that have the potential to grow urgently require equity capital investments to do so. The green light for pension funds to invest in private equity is complemented by the Minister of Finance’s announcement of the incentives for the junior stock exchange which will provide public equity to local SMEs.
SEAF has launched and managed private equity funds in emerging markets around the globe for over three decades. In October 2019, it launched its first Caribbean private equity Fund based on investments from private regional financial entities. In 2020, IDB Invest, a member of the Inter-American Development Bank Group, joined the Fund. After extensive due diligence IDB Invest approved a US$10m investment, along with a grant technical assistance facility to support target companies and a US$10m blended debt facility for climate change investments.
Following the confirmation by the Central Bank of IFI status for the Fund, the RBC Trust (Trinidad and Tobago) Limited, a wholly owned subsidiary of the Royal Bank of Canada, on behalf of its third-party client funds managed, decided it would make an investment in the Fund, as the first commitment by a Trinidad and Tobago registered pension plan into a private equity fund, as a part of the final close of the Fund.
IDB Invest said, about RBC’s subscription into the Fund: “We greatly welcome another reputable investor joining the Fund, which will strengthen SEAF’s efforts in the region and also set a new standard for local institutional investors participating in this much-needed asset class.”
SEAF said: “We are delighted that RBC (TT) took its decision to invest once the Central Bank of Trinidad and Tobago confirmed IFI status for the Fund. SEAF believes that RBC’s leadership will result in better opportunities and faster growth for private businesses in Trinidad and Tobago and Caricom more generally.”
SEAF is an SEC-registered global impact investment management company located in Washington, D.C, with 15 offices in Central and Eastern Europe, Latin America, the Caribbean, Asia, the Middle East, North Africa, and Sub-Saharan Africa. Utilizing an ESG+ investment approach, SEAF selectively makes structured debt and equity investments in locally-owned small and medium enterprises in emerging markets that have high growth potential, focusing on the key impact themes of climate resilience, food security, and inclusion. Over the past three decades, SEAF has managed more than 40 Funds with over 400 investments across 33 countries.