Gazelle Finance provides growth-oriented risk capital to SMEs in the Eurasia region. Gazelle Finance successfully launched its first investment fund in March 2017, Gazelle Fund LP, with $42M in committed capital in place. The fund is currently active and investing in SMEs in Georgia and Armenia. As Gazelle Finance raises more capital, it plans to expand further in the Eurasia region.
Gazelle Finance provides growth-oriented risk capital to SMEs. SMEs are positioned between microenterprises and large corporations, typically employing less than 250 employees and generating revenues in the range of $200,000 to $15 million in revenues. Gazelle Finance addresses the barriers to SME financing by offering an investment product positioned between bank financing and private equity. This hybrid approach addresses the constraints of market illiquidity that is typical of many emerging and frontier markets, while providing a combination of patient risk capital and the know-how of a strategic investment partner to allow SMEs to rapidly develop and grow their business.
There are many types of SMEs, though Gazelle Finance specifically targets “gazelles,” defined as businesses growing at or poised to grow at 20 percent per annum for four years or more when provided with access to sufficient capital on reasonable terms. The companies in which we invest have a successful track record and the capacity to grow rapidly. Our investment officers work closely with investee management teams to provide a customized financing solution utilizing our standardized suite of investments and technical assistance products.
Traditionally SME investment funds are plagued by transaction cost inefficiencies and equity structuring impediments, namely targeting unrealistic third party exits, which limit the fund manager's ability to build large portfolios of investments and generate sufficient liquidity to distribute returns to investors. Our model closely aligns the interests of the investors and the entrepreneurs, as it simplifies the equity structuring process, offers strong protections for capital, and eliminates the need for a traditional private equity liquidity event. The investment model streamlines structuring so we can invest in more businesses more quickly. Gazelle Finance is uniquely positioned to scale up a large portfolio of small investments with defined exits, then reinvest the reflows into additional businesses. At Gazelle Finance, the velocity of money is what makes us different.