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Featuring:

Alternativa Peru on p.3

Global Partnerships

IN V E STORS RE P ORT www.globalpartnerships.org

Second Quarter 2015 | April 1 - June 30, 2015

For more information, contact: Jason Henning, VP, Investor and Donor Relations jhenning@globalpartnerships.org | 206.456.7832

Photo courtesy of Alternativa Peru

Seattle Headquarters: Global Partnerships, 1932 First Avenue, Suite 400, Seattle, WA 98101, USA | Tel: 206.652.8773 | Website: www.globalpartnerships.org


| Letter from the CIOO |

August 14, 2015 Dear Investor, Within the impact investing industry, microfinance has long been viewed as a fine example of an investable, market-sustained solution to poverty. Hundreds of millions of dollars have flowed to microfinance institutions (MFIs) and microfinance investment vehicles—across asset classes— generating social impact alongside consistent and stable financial returns. Yet despite the popularity of microfinance as an investment sector, recent press has questioned its social impact in the lives of the people being served. For example, a recent article in The Guardian argues that most microfinance loans are used for consumption—not income generation—and therefore “end up making poverty worse.” While Global Partnerships invests into many types of channels, such as agricultural organizations and solar light businesses, our roots are in microfinance institutions (MFIs), and we continue to selectively invest through this channel. Over our 20+ year history, we have learned many lessons, and one guiding principle has been “it takes more than a loan.” We observed, for example, that extending credit to someone living in poverty that led to over-indebtedness clearly had a negative social impact, and providing a loan for consumption or non-productive purposes or at unnecessarily high costs did not lift people out of poverty. On the other hand, the combination of women-centered credit and tailored education—especially when delivered through the group lending platform at a reasonable cost—can have a meaningful impact at the household level. Clients become empowered and informed decision makers and are able to smooth their incomes and consumption, build assets and increase their capacity to anticipate and deal with major expenses. So, the question should not be whether microfinance as a whole results in positive or negative outcomes, but rather “what MFI models are most effective at the household level?” As with any product or service, we believe that the most positive impact occurs when the provider has the best interests of the household in mind. We work with a relatively select portfolio of MFIs, but have examined hundreds with which we have chosen not to work. We begin our process by understanding whether the institution is more focused on the household or on their own growth and financial return, and to what extent their model delivers value in a sustainable and scalable way. We are wary of institutions that cannot provide meaningful metrics of how they evaluate impact, or that seem to serve the owners and managers more than their clients.

BY THE NUMBERS

GP seeks out small and mid-size MFIs that have a combination of solid financial performance and positive impact at the household level, implementing business models that have carefully been built to leverage and integrate various services that a person in poverty needs. Alternativa Peru, featured in this quarter’s report, represents this sweet spot where we seek to invest for highest impact and a well-managed fund investment. Thank you for your continued support of our work, Best regards,

Mark Coffey Chief Investment and Operating Officer

13 COUNTRIES

where Global Partnerships has worked

83 PARTNERS

with whom Global Partnerships has worked

3.3 MILLION LIVES IMPACTED

(estimated number of lives impacted as a result of GP’s contribution to the meaningful opportunities delivered by partner organizations)

$168.4 MILLION Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 2

cumulative capital deployed


| Featured Partner: Alternativa Peru |

Budgeting is one of the education topics taught during Alternativa Peru’s village bank meetings. Photo c/o Alternativa Peru. Click to see all partner profiles

Peru’s economic growth has helped reduce poverty levels but a wide poverty gap persists. In rural areas, 53% live in poverty versus 17% in urban areas. WHO Alternativa Peru is a microfinance institution whose mission is to contribute to the development of low-income people, families and communities in the region of Lima. The organization principally serves women entrepreneurs at the low end of the market, providing credit and broad based education through a group lending platform. Country: Peru Year Founded: 1979 Number of Employees: 17 Clients served: 2,951 Average Loan Size Per Client: $361

WHAT

WHY

Alternativa Peru provides microcredit loans to its clients through village banks and takes advantage of the regularly scheduled credit meetings to deliver education on topics such as gender, health and the environment as well as focusing on issues that pertain to personal, business and organizational development. Alternativa Peru also works with the National Cancer League to conduct early detection campaigns in remote communities, providing clients and their families with access to discounted screening.

Alternativa Peru stands out from its peers in the region of Lima due to its commitment to serve the low end of the market in a very client-centered approach. The broad based education program is designed to capture client feedback and GP believes Alternativa Peru is striving to provide best-in-class services to our target demographic of those in greatest need of financial inclusion and education services.

Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 3


| Social Investment Fund 2010 |

Fund Manager’s Comments SCALE TOTAL LOANPORTFOLIO PORTFOLIO TOTAL PARTNER PARTNER LOAN US USdollars dollarsin in millions millions 1000 800 600 400 200 0

FY11

FY12

FY13

FY14

FY15

TOTALPEOPLE PEOPLESERVED SERVED TOTAL Inmillions millions In 1.2 1.0 0.8 0.6 0.4 0.2 0

During the second quarter of 2015, SIF 2010 made one trade finance disbursement and extended the amortization of one other partner loan. In August the Fund will pre-pay $1.7 million in principal, plus interest, to senior debt investors, with a principal payment of $8.8 million, plus interest, to be made as scheduled at the first investor maturity in October. The final scheduled investor payments will be made in June 2016. All principal and interest payments from the Fund’s partners were once again made on time during the second quarter, reflecting the strength of the underlying investments.

Fund Overview $24.4MM Capital Invested FY11

FY12

FY13

FY14

FY15

$25.0MM Total Fund Capital

6

UST

$67.4MM Cumulative

Fund

Capital Deployed

119 Cumulative Number of

4

Loans FY11

FY12

FY13

FY14

FY15

19 Number of Consecutive

4 3 2

898K Lives Impacted

FY11

FY12

FY13

FY14

FY15

0

2

3

4

Current Number of Partners

Average Loan Size

77%

Inception Date October 21, 2010

56%

Fund Manager Global Partnerships

1

Portfolio Overview

(Estimated number of lives impacted as a result of SIF 2010’s contribution to the meaningful opportunities delivered by partner organizations.)

1 0

3.64%

$945

Quarters PAR=0 AVERAGEWRITEOFFS WRITEOFFS AVERAGE Assetamount amountcharged chargedto toloss loss as as aa % % Asset

0.55%

31

2 0

MATCHED TREASURIES

As a %

Called

PARTNER PORTFOLIO QUALITY AVERAGEPAR PAR>30 > 30 AVERAGE Loanspast pastdue duegreater greaterthan than3030days daysasasa a%% Loans

FUND RETURN v. DURATION-MATCHED FUND RETURN v. DURATIONTREASURIES

Investment Currency US$ and fully hedged local currency

Percentage of People Served Who are Women

Percentage of People Served Living in Rural Areas

Type of Fund Debt

Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 4

5


Outstanding Positions | Distribution by Institution and Country |

Social Investment Fund 2010 Percent of investable assets

5% Cash

26% Peru 20% 20% Bolivia Bolivia 14% Nicaragua

8% Mexico

16% Ecuador

9% El Salvador

2% Honduras <1% Haiti

2% Guatemala Note: All percentages have been rounded to the nearest whole number.

BOLIVIA (20%)

HAITI (<1%)

PERU (26%)

Crecer (4%) EMPRENDER (3%) FONDECO (2%) IDEPRO (6%) Pro Rural (1%) Sembrar Sartawi (4%)

Fonkoze (<1%)

ADRA (8%) Alternativa (Peru) (2%) APROCASSI (3%) Crediflorida (1%) FONDESURCO (3%) NORANDINO (3%) Pro Mujer in Peru (6%)

ECUADOR (16%) Banco D-MIRO (3%) ESPOIR (4%) Fundaci贸n Faces (3%) Vision Fund Ecuador (6%)

EL SALVADOR (9%) ENLACE (6%) CrediCampo (3%)

GUATEMALA (2%)

HONDURAS (2%) IDH (2%) RAOS (0%)

MEXICO (8%) CESMACH (0%) CONSERVA (4%) Triunfo Verde (0%) VisionFund Mexico (4%)

CASH (5%)

NICARAGUA (14%) Aldea Global (3%) FDL (3%) MiCr茅dito (4%) Pro Mujer in Nicaragua (4%)

Friendship Bridge (2%) Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 5


| Social Investment Fund 5.0 |

Fund Manager’s Comments SCALE TOTAL PARTNER LOAN PORTFOLIO TOTAL PARTNER LOAN PORTFOLIO US dollarsinin millions US dollars millions 600 480 360 240 120 0

FY13

FY14

FY15

The Fund is continuing to accept new commitments from investors and will be calling additional capital during the third quarter. It is anticipated that the Fund will reach its $50 million target in total capital commitments in the third or fourth quarter.

Fund Overview

TOTALPEOPLE PEOPLESERVED SERVED TOTAL In Inmillions millions 1.2 1.0 0.8 0.6 0.4 0.2 0

SIF 5.0 disbursed over $4.3 million to eight partners and renewed one additional loan. Three of those disbursements were to new partners in Nicaragua, Peru and Guatemala, respectively. During the quarter, all SIF 5.0 partners made payments as agreed and are aligned with one or more of GP’s impact areas.

$35.7MM Capital Invested $37.6MM Total Fund Capital FY13

FY14

Called

UST

$43.0MM Cumulative

Fund

Capital Deployed

50 Cumulative Number of

30

Loans greater than 30 days as a as % a% Loanspast pastdue due greater than 30 days

Loans

8

9 Number of Consecutive

6

2 FY14

FY15

AVERAGEWRITEOFFS WRITEOFFS AVERAGE Assetamount amountcharged chargedto toloss lossas asaa% % Asset 4 3 2

0

411K Lives Impacted

FY13

FY14

FY15

0

1

2

3

4

Portfolio Overview Current Number of Partners

Average Loan Size

(Estimated number of lives impacted as a result of SIF 5.0’s contribution to the meaningful opportunities delivered by partner organizations.)

55%

Inception Date March 25, 2013

72%

Fund Manager Global Partnerships

1

3.28%

$1,113

Quarters PAR=0

4

FY13

0.83%

28

10

0

MATCHED TREASURIES

As a %

FY15

PARTNER PORTFOLIO QUALITY AVERAGEPAR PAR > AVERAGE >30

FUND RETURN v. DURATION-MATCHED FUND RETURN v. DURATIONTREASURIES

Investment Currency US$ and fully hedged local currency

Percentage of People Served Who are Women

Percentage of People Served Living in Rural Areas

Type of Fund Debt

Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 6

5


Outstanding Positions | Distribution by Institution and Country |

Social Investment Fund 5.0 Percent of investable assets

3% Colombia 23% Bolivia 2% Cash 17% Ecuador

9% Paraguay 2% Latin America

3% El Salvador

8% Peru 12% Nicaragua

10% Mexico

7% Guatemala

Note: All percentages have been rounded to the nearest whole number.

BOLIVIA (23%) Emprender (4%) FONDECO (3%) Idepro (5%) PRO RURAL (4%) Sembrar Sartawi (7%)

GUATEMALA (7%)

PERU (8%)

CDRO (1%) NEW Fundea (5%) FECCEG/ECEG (0%) PROFASA (1%)

Cenfrocafe (2%) Coop Sol y Caf茅 (1%) NEW Pro Mujer in Peru (5%)

MEXICO (10%) Fundaci贸n Amanecer (3%)

Pro Mujer Mexico (5%) Vision Fund Mexico (5%)

ECUADOR (17%)

NICARAGUA (12%)

COLOMBIA (3%)

Banco D-MIRO (5%) ESPOIR (4%) Fundaci贸n Alternativa (4%) Vision Fund Ecuador (4%)

COOPEFACSA (1%) NEW FDL (5%) Fundenuse (1%) Pro Mujer in Nicaragua (5%)

EL SALVADOR (3%)

PARAGUAY (9%)

CrediCampo (3%)

LATIN AMERICA (MULTICOUNTRY) (2%) Greenlight Planet (1%) Tecnosol (1%)

CASH (2%)

Arasy (5%) BioExport (4%) Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 7


Outstanding Positions | Distribution by Institution and Country |

All Funds

Percent of investable assets 6% Paraguay 1% Latin America

3% 1% Honduras Cash 5% Guatemala

<1% Haiti

5% El Salvador

2% Colombia

9% Mexico

13% Nicaragua

17% Ecuador

16% Peru 22% Bolivia

Note: All percentages have been rounded to the nearest whole number.

BOLIVIA (22%)

PARAGUAY (6%)

COLOMBIA (2%)

PERU (16%)

ECUADOR (17%)

LATIN AMERICA (MULTICOUNTRY) (1%)

EL SALVADOR (5%) CASH (3%) GUATEMALA (5%) HAITI (<1%) HONDURAS (1%) MEXICO (9%) NICARAGUA (13%)

Global Partnerships | Q2 2015 | As of June 30, 2015 | Page 8

GP Investors Report | Q2 | 2015  
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