Equity Funding

Investment Criteria

CEDA's selection criterion takes the following into account:

Business Plan

A clearly defined and realistic business plan giving a clear strategy for its success.

Management

The business should have or provide for a highly skilled and committed management team

Citizen Empowerment

Being an empowerment vehicle CEDA requires that the businesses it finances have citizen participation. This translates to having citizens forming part of both the ownership structure of the business including participation in the management of the business.

Owners Contribution

The promoters are required to take personal risk in their projects and will make an equity contribution which equates to a minimum of 15% of the funding requirement.

Growth potential and Returns

We are interested in ventures with exceptionally high growth potential capable of providing financial returns commensurate with the level of risk taken. The investment must achieve a minimum internal rate of return (IRR) of 25%.

Size of target Company

P4 million to P30 million.

Ownership Requirement

CEDA requires that it holds a significant but minority equity stake i.e a minimum of 26% but not more than 49% of the Investee company's ordinary shares.

Typical holding period to exit
5-10 years.

Types of transactions

  • Start-ups or green fields.

  • Early stage investing.

  • Expansion capital.

  • Mergers and acquisitions.

  • Restructuring and turnarounds

  • Management buyouts and buy-ins

Monitoring

As a rule we seek representation on the Board of Directors of our Investee    companies.

Classes of Capital Used

  • Equity capital (ordinary shares)

  • Mezzanine capital (preference shares, debenture notes, options and warrants)

  • Debt (provided CEDA has an equity stake in the company)

Product Sectors: 
Structured Finance

Equity Funding