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"Beyond Charity" - Socially Responsible Investments
New investment vehicles allow investors to tackle poverty as well as major environmental and social issues
Zurich, March 28, 2008 In the current issue of Credit Suisse's "Global Investor," analysts and external experts examine how business practices are increasingly being used for social purposes. The new issue, titled "Beyond Charity," provides an overview of an innovative range of socially responsible investments that combine financial and social returns, and open new opportunities for investors. Microfinance, private-equity financing, and socially responsible funds are enabling investors to add social commitment to their investment strategies. Credit Suisse has in the past already successfully been providing products to socially responsible investors. These include the responsAbility Global Microfinance Fund and Charity Notes, which provide investors with positive returns and support charitable causes.
The battle against the economic exclusion of the world's poor is no longer solely the domain of governmental and charitable organizations. Today, a variety of organizations and business models serves the world's lowest income class. For instance, the Latin American ACP Group from Peru is a pioneer in promoting development via a business ethos, building a range of activities to help small entrepreneurs overcome social and economic exclusion. Traditional charitable organizations are also looking more and more at market-based solutions. The global development agency Oxfam for example is taking a more differentiated strategy, combining traditional donation with market-oriented measures to benefit from both approaches. In addition, philanthropists are developing their own distinct models to use their wealth, and are establishing foundations which are run with the same vigor as their business success. The Gatsby Charitable Foundation, established by UK-based Sainsbury retail dynasty, offers loans and technical support to small businesses in Africa to tackle poverty. The businesses must in turn develop sound business strategies.
Investing in the Bottom of the Pyramid through Social Investments
Microfinance has become an established tool in the fight against poverty. Its development over the past decades, through all stages, from donation to investment theme and its own investment category demonstrates that potential lies in the well-balanced interaction of the different players with their various tools. Nowadays, also institutional investors are increasingly investing in microfinance.
Social investors are particularly important for investments at the bottom of the pyramid. Furthermore, financial service providers have become increasingly important as a link between investors and socially relevant initiatives. In this regard, Credit Suisse five years ago, in conjunction with other financial service providers, founded the Zurich-based responsAbility to specialize in social investments. Alongside microfinance, responsAbility covers a wide range of social investment themes such as freedom of the press, fair trade, and promotion of small and medium-sized companies.
Symphasis Charitable Foundation supports school projects in Africa through Charity Notes
The Symphasis Foundation was established in 2002 by Credit Suisse as a charitable foundation, and it provides targeted support for sustainable social welfare projects in Switzerland and abroad. Since its inception, the foundation has supported some 150 projects. One of the aims of the foundation is to promote education for children in Africa. With its two new Charity Notes, Credit Suisse is offering investors an opportunity to achieve attractive returns - depending on the market's performance - and at the same time support education for children in Africa. The Charity Opportunity Note is a promising alternative to investing in bonds, and offers investors one hundred percent capital protection at maturity as well as a variable coupon. The Charity Yield Note, the second of the new notes, provides fixed interest payments and conditional capital protection. Credit Suisse bears all administrative costs for the Symphasis Foundation, and pays the foundation 1 to 1.5 percent of the nominal value for each note that is subscribed. Furthermore, Credit Suisse will ensure that all the issuing commission is paid to Symphasis.
Credit Suisse to Launch New Social Responsibility Index
Credit Suisse will launch in the coming weeks an index that encompasses social responsibility criteria in addition to strong valuation and performance characteristics. The index will be composed of stocks that rank highly on both social responsibility criteria and financial ratios, the latter being defined by HOLT, Credit Suisse's proprietary financial analysis tool. The index will offer investors exposure to a portfolio of stocks that are screened for strong characteristics in terms of corporate performance, valuation and momentum using HOLT's proprietary framework. Coupled with a well established method of identifying socially responsible companies, including assessing political, environmental, labor, and human rights issues, the approach used in the systematic screening process has shown in simulations to consistently identify stocks that collectively outperform the market.
Enquiries:
- Media Relations Credit Suisse, Tel. +41 844 33 88 44, media.relations@credit-suisse.com
- Juliette Lim Fat, Research Analyst, Thematic & Derivatives Research, Tel. +41 44 334 52 67, juliette.lim-fat@credit-suisse.com
- Hervé Prettre, Head of Thematic & Trading Research/Index Dvpt, Tel. +41 44 334 88 57, herve.prettre@credit-suisse.com
- Josef R. Zellweger, Client Foundations, Tel. +41 44 334 41 99, josef.zellweger@credit-suisse.com
- André Rheinberger, Structured Derivatives Advisory CH, Tel. +41 44 335 70 08, andre.rheinberger.2@credit-suisse.com
- Klaus Tischhauser, Managing Director, Tel. +41 44 250 99 38, klaus.tischhauser@responsAbility.com
- Credit Suisse
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responsAbility Global Microfinance Fund (hereinafter "the Fund") is an investment fund under Luxembourg law registered for public sale in Switzerland as a foreign investment fund with specific risk features. It is represented in Switzerland by Credit Suisse Asset Management Funds, Zurich. The paying agent in Switzerland is Credit Suisse, Zurich. The Fund invests in securities through which financial institutions in developing countries are financed or refinanced. Investors' attention is expressly drawn to the risks detailed in the Sales Prospectus, as well as the low liquidity and difficulty in valuing the Fund investments, which are generally not listed or traded. Investors must be prepared to accept the risk of heavy price losses or even the total loss of the invested capital. The risks of the Fund are not comparable with those of other funds that invest in bonds of issuers in developed countries. Units in the responsAbility Global Microfinance Fund should therefore account for only a small proportion of an investor's portfolio, and the units should be held within a diversified portfolio. However, the Fund and the Investment Advisor shall endeavour to keep the associated risks as low as possible through the careful selection of investments and suitable diversification. Subscriptions are only valid if made on the basis of the current prospectus and latest annual report (and semi-annual report, if more recent). Prospectuses, copies of the terms and conditions and the most recent annual and semi-annual reports may be obtained free of charge from Credit Suisse Asset Management Fund Service (Luxembourg) S.A., Luxembourg, Credit Suisse Asset Management Funds, Zurich or any Credit Suisse Group bank in Switzerland.
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