Overseas Haitians and Portfolio Investments

1
Overseas Haitians and Portfolio Investments

• Patrice Backer
• Westin Harbour Castle
• Toronto, Canada
• May 30, 2005

2
Agenda

• Haitian Diaspora
• Remittances Investments
• The PromoCapital Strategy

3
Migration Patterns

• 1930s, 40s and 50s
• Cuba, French Guyana, Dominican Republic
• Primarily rural population, field laborers
  sugar cane cutters
• 1960s and early 1970s
• US (Northeast), Canada, French-speaking Africa,
  France (later to US or Canada), Bahamas
• Professionals ? brain drain
• Late 1970s and early 80s
• US (Florida), Bahamas, Turks and Caicos
• Economic migrants primarily from the North
  (Cap-Haitien, Port-de-Paix, La Tortue) and
  vicinities
• Late 1990s/Early 2000s
• Siphoning off by Canada of our best and
  brightest
• Age range between 25 and 40
• Professionals ? brain drain
• Middle management in private sector affected

4
Geographic Distribution
TOTAL SELECTED LOCATIONS 1,267,000
5
Agenda

• Haitian Diaspora
• Remittances Investments
• The PromoCapital Strategy

6
Remittances are Critical to Haitian Economy

• 28 of GDP (Est. 2004) ? 17 in 1999
• More than USD 1 billion annually (formal and
  informal) ? mostly from the US
• Primarily geared towards consumption
• Living Expenses (groceries, clothing,
  rent/mortgage)
• Education
• Gifts for special occasion
• Medical expenses
• New home constructions

7
Comparative Data
Source SOGEBANK
8
But There Are Issues

• Large percentage goes right back to donor
  countries due to purchase of imported products
• Remittances/Investments are sometimes
  counter-productive or mismanaged
• Assisted mentality
• Waste/theft by family members or recipients
• Long-term
• Haitian migration has slowed to a trickle
• Expected tapering-off of remittances in 15-20
  years

9
Overseas Haitians Also Invest Through SMEs

• Lack of products and services provides
  opportunities, especially in food exports
• Trade conducted primarily out of Florida
• Proximity
• Entrepreneurial spirit of local Haitian community
• Businesses are small and face same challenges as
  their US counterparts
• Lack of financing
• Deficient management skills
• Competition and lack of growth opportunities
• Haiti bureaucracy / corruption

10
Initiatives from the Diaspora Numerous but Small
11
But Portfolio Investments Are Not Common

• Priority is supporting family or community
  through remittances
• Trust factor ? past scams, 2001-2002
  cooperative scandal
• Securities laws in the US ? major issue !!!
• No securities markets liquidity issues
• PromoCapital ? new approach at the issue

12
Agenda

• Haitian Diaspora
• Remittances Investments
• The PromoCapital Strategy

13
PromoCapital Overview

• Structure
• PromoCapital Haiti S.A. SFD
• PromoCapital USA, Inc. Wholly owned subsidiary
• Capital Structure
• 50 owned by Haitian Americans and US residents
• 50 owned by Haitians and Haiti residents
• There are 67 shareholders
• 36 in the US
• 31 in Haiti
• Focus on larger investments
• Infrastructure
• Real Estate Large scale residential and
  commercial
• National production / Export oriented

14
PromoCapital US Partners
15
Channeling Diaspora Investments Differently
16
What Is the PromoCapital USA Fund?

• A collective investment vehicle to increase
  efficiency of capital raising process
• Initial Fund Target USD 5 million

17
Why the PromoCapital USA Fund?

• Offer to non-entrepreneurs based abroad the
  opportunity to invest efficiently in Haiti
• Facilitate the capital raising process
• Either raise funds for clients on a case-by-case
  basis
• Pool investors assets into a legal vehicle ready
  to invest
• Improve the investment profile of the country

18
How Is It Structured?

• Florida Limited Liability Limited Partnership
  (LLLP)
• General Partner PromoCapital Advisors LLC
• Investors are Limited Partners
• Accredited investors
• Limits on who can be invited to invest

19
Investment Policies

• Maximum of 20 invested in any one company
• Maximum of 30 of assets invested in any one
  industry (as defined by NAIC or SIC major code)
• Strong cash flow generation potential

20
Targeted Industries

• Infrastructure
• Electricity
• Telecom
• Manufacturing
• Textile
• Food processing
• Real Estate
• Commercial

21
MèsiAnpilThankYouMerciBeaucoup