BlueOrchard offers a range of credit investment strategies, including private debt and listed debt. With greater liquidity than private debt, listed debt represents an alternative to this asset class, while also enabling tangible social impact.
Description of listed debt
Listed debt is one of the largest asset classes with a high capacity to absorb capital inflows. Hence, it offers a large potential investment universe that allows investors to diversify their risk with high liquidity. BlueOrchard funds currently invest in bonds from global Emerging Markets, covering Africa, Latin America, Central and Eastern Europe and Asia. As a pioneering impact investor, our presence and network in the regions has been developed over 20 years. We invest in institutions that share our values and that consider positive social and environmental impact essential to their mission.
Our investment objective is to help closing the investment gap for key SDG sectors in Emerging and Frontier Markets, where private sector contributions are critical as public sector contributions may be insufficient. The independent Blended Finance Impact Management Team conducts a social performance analysis on potential bond investments with publicly available information, using proprietary SPIRIT ESG and impact assessment tool. Our SPIRIT tools are at the forefront of industry standards. The objective of the assessment is to identify Environmental, Social, Governance related risks, evaluate the impact on people and planet of the bond investments selected as well as to identify the ultimate end beneficiaries and classify them in impact categories. The bond investments are also assessed through a comprehensive SDG mapping in line with industry standards as well as through a materiality guidance. All the SPRIT tools have been adapted to the needs and specificities of the specific asset classes (e.g. fixed income, sustainable infra, and PE) and themes (e.g. financial inclusion and insurance sectors) BlueOrchard’s B.Impact framework is aligned with the Operating Principles for Impact Management (OPIM). BlueOrchard’s flagship fund has an annual disclosure statement on its alignment with the OPIM and was subject to an external independent verification in 2020.
In the portfolio investment process for listed debt securities, BlueOrchard focuses on individual issuer credit analysis but also manages country risk allocation and monitors the global macro environment. This is combined with a systematic risk management process that views the portfolio as a whole and considers opportunities and risks in the market as being equally important. In addition, being the first commercial manager of microfinance debt investments worldwide, BlueOrchard has built an unparalleled track record and expertise in credit impact investments in frontier and emerging markets. Our local presence, network and longstanding global relationships give us unique insights into local markets.