{"id":6870,"date":"2023-05-19T15:07:40","date_gmt":"2023-05-19T13:07:40","guid":{"rendered":"https:\/\/norfund.wpenginepowered.com\/annualreport-2022\/?page_id=6870"},"modified":"2023-06-01T14:41:01","modified_gmt":"2023-06-01T12:41:01","slug":"exited-companies","status":"publish","type":"page","link":"https:\/\/reports.norfund.no\/annualreport-2022\/development-mandate\/exited-companies\/","title":{"rendered":"Exited companies"},"content":{"rendered":"\n<p class=\"has-ingress-font-size\"><strong>Norfund creates the greatest development effects by ensuring that its capital is constantly deployed where it contributes most. We strive to be a patient, long-term investor that exits investments when we are no longer additional (needed) and others can take over.<\/strong><\/p>\n\n\n\n<p>When an investment is made, its duration and the exit strategy are planned at the same time. Typically, Norfund exits equity investments after 5-10 years, debt holdings after 5-7 years and fund investments after 10-12 years. However, investments might be exited earlier or later than planned due to unexpected circumstances.<\/p>\n\n\n\n<p>Returns and dividends from investments, as well as sales proceeds following an exit are reinvested in new businesses in which there is a greater need for our capital.<\/p>\n\n\n\n<div class=\"wp-block-group alignfull has-gray-light-background-color has-background is-layout-flow\"><div class=\"wp-block-group__inner-container\">\n<h2 class=\"wp-block-heading\"><strong>Exit and post-exit analysis<\/strong><strong><\/strong><\/h2>\n\n\n\n<p>Contribute to creating sustainable companies that leave a lasting impact is at the core of Norfund\u2019s mandate. At the same time, we are expected to take risk. At regular intervals we take stock and assess whether we succeed in delivering on our mandate and balance the two. The first exit analysis Norfund did was in 2015, followed by a 2019 analysis. In 2022 Norfund undertook an exit and post-exit analysis of 70 companies, with 51 of these qualifying for post-exit analysis as well.<\/p>\n\n\n\n<p>In the exit analysis, companies are followed from time of investment, to exit, and to three years after Norfund\u2019s exit (\u201cpost-exit\u201d) to understand whether they survive, and if they thrive.<\/p>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">What is defined as an exit?<\/h3><div class=\"norfund-fact-box__content\">\n<p>A project is considered exited when all Norfund&#8217;s instruments with the investee are exited and no direct or indirect relationship exists any longer.<\/p>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">What is post-exit?<\/h3><div class=\"norfund-fact-box__content\">\n<p>The post-exit period is defined as three years after Norfund\u2019s exit. The dataset consisted of 70 projects that have been exited to date. Of these, 51 are eligible for post-exit analysis \u2013 meaning more than three years have elapsed since Norfund exited the projects.<\/p>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">Limitations<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Dataset is not complete for all companies, and skewed towards large companies<\/li><li>Different holding periods \u2013 and total figures are not weighted for holding period<\/li><li>Loans are overrepresented in the dataset because they are self-exiting<\/li><li>A liquidation is an automatic exit and may result in overrepresentation<\/li><li>Fund investments are not included<\/li><li>Data is not attributed to Norfund\u2019s contribution<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-key-results\"><strong>Key results<\/strong><\/h2>\n\n\n\n<p>At the time of exit:<\/p>\n\n\n\n<ul><li>80% of companies were active (in original form or merged)<\/li><li>20% of companies were liquidated during Norfund\u2019s holding period<\/li><li>Equity investments had a higher share liquidated companies than loans<\/li><\/ul>\n\n\n\n<p>Three years post-exit:<\/p>\n\n\n\n<ul><li>87% of the companies that were active at Norfund\u2019s exit were still active<\/li><li>All companies that Norfund had exited at fair price were still active<\/li><li>75% of companies where Norfund had taken a write-off or write-down at exit, were liquidated<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image alignwide size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"756\" src=\"https:\/\/reports.norfund.no\/wp-content\/uploads\/sites\/5\/2023\/06\/Norfund_exit-1024x756.png\" alt=\"\" class=\"wp-image-7899\" srcset=\"https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Norfund_exit-1024x756.png 1024w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Norfund_exit-300x222.png 300w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Norfund_exit-768x567.png 768w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Norfund_exit-1536x1134.png 1536w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Norfund_exit-2048x1512.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Job creation in exited portfolio companies<\/strong> *<\/h3>\n\n\n\n<ul><li>Just over half of the companies saw an increase in the number of jobs from entry to exit<\/li><li>In total, there is a near doubling in number of jobs from entry to exit, mainly driven by a few large financial institutions<\/li><li>From exit to post exit, more than half the companies continue to see an increase in jobs, albeit at a significantly lower rate<\/li><li>Companies with a decline in jobs post exit are a combination of renewable energy investments (to be expected as they move from construction to operation), financial institutions, and companies liquidated<br><br><em>*with available data at entry and exit<\/em><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image alignwide size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"938\" height=\"1024\" src=\"https:\/\/reports.norfund.no\/wp-content\/uploads\/sites\/5\/2023\/06\/Job_creation-938x1024.png\" alt=\"\" class=\"wp-image-7900\" srcset=\"https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Job_creation-938x1024.png 938w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Job_creation-275x300.png 275w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Job_creation-768x839.png 768w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Job_creation-1407x1536.png 1407w, https:\/\/reports.norfund.no\/annualreport-2022\/wp-content\/uploads\/sites\/5\/2023\/06\/Job_creation-1875x2048.png 1875w\" sizes=\"(max-width: 938px) 100vw, 938px\" \/><\/figure>\n\n\n\n<p>Moreover, the analysis looked at taxes paid, turnover, and net income \u2013 all with average annual growth (CAGR) of 17-20%, both during Norfund ownership as well as post-exit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Financial return<\/strong><\/h3>\n\n\n\n<ul><li>Positive IRR seems to be correlated with higher job growth both during Norfund ownership and post Norfund exit<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-exited-companies-2022\"><strong>Exited companies 2022<\/strong><\/h2>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">ACLEDA Bank Lao Ltd.<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Region: Asia<\/li><li>Sector: Financial Inclusion<\/li><li>First investment year: 2014<\/li><li>Investment: 141.9 MNOK<\/li><li>IRR: 10%<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">Aureos Latin America Fund<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Region: Latin America<\/li><li>Sector: SME Funds<\/li><li>First investment year: 2007<\/li><li>Investment: 183.1 MNOK<\/li><li>IRR: 5.3%<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">Bronkhorstspruit Biogas Plant<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Region: Africa<\/li><li>Sector: Renewable Energy<\/li><li>First investment year: 2011<\/li><li>Investment: 26.3 MNOK<\/li><li>IRR: -11.4%<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">Fanisi Venture Management Company<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Region: Africa<\/li><li>Sector: SME Funds<\/li><li>First investment year: 2009<\/li><li>Investment: 0.9 MNOK<\/li><li>IRR: -100%<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">New Africa Power<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Region: Africa<\/li><li>Sector: Renewable Energy<\/li><li>First investment year: 2017<\/li><li>Investment: 8.7 MNOK<\/li><li>IRR: N\/A<\/li><\/ul>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-norfund-fact-box\"><h3 class=\"norfund-fact-box__title\">Starsight<\/h3><div class=\"norfund-fact-box__content\">\n<ul><li>Region: Africa<\/li><li>Sector: Renewable Energy<\/li><li>First investment year: 2019<\/li><li>Investment: 54.4 MNOK<\/li><li>IRR: 11.63%<\/li><\/ul>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Norfund creates the greatest development effects by ensuring that its capital is constantly deployed where it contributes most. We strive to be a patient, long-term investor that exits investments when we are no longer additional (needed) and others can take over. When an investment is made, its duration and the exit strategy are planned at [&hellip;]<\/p>\n","protected":false},"author":23,"featured_media":0,"parent":1309,"menu_order":4,"comment_status":"closed","ping_status":"closed","template":"","meta":{"norfund_header_layout":"","norfund_header_layout_image_id":0,"norfund_header_layout_image_focal_point_x":0,"norfund_header_layout_image_focal_point_y":0,"norfund_header_layout_suptitle":"","norfund_header_layout_subtitle":"","norfund_header_layout_title":"","teft_cards_image_id":0,"teft_cards_image_focal_point_x":0,"teft_cards_image_focal_point_y":0,"teft_cards_title":"","teft_cards_excerpt":""},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Exited companies | Annual Report 2022<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/reports.norfund.no\/annualreport-2022\/development-mandate\/exited-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exited companies | Annual Report 2022\" \/>\n<meta property=\"og:description\" content=\"Norfund creates the greatest development effects by ensuring that its capital is constantly deployed where it contributes most. 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