Many of the world’s frontier markets do not have robust banking sectors and thus suffer from a lack of access not only to equity financing, but also to debt — especially longer-term debt financing. In such cases, Schulze Global fills this gap with its debt platform. The firm applies the same rigorous standards and criteria as it does with its private equity platform but structures its investments in the form of loans rather than equity.

Schulze Global will consider debt investments in proven management teams with existing cash flow. It seeks to invest in businesses where it understands the financing and cash-flow needs, and the broader revenue potential, of the particular company seeking debt financing as well as of the sector in which the company operates.

Schulze Global’s debt platform makes use of the firm’s local presence, experience with conducting due diligence, and hands-on approach to portfolio management to sustainably issue debt in frontier markets.

Schulze Global’s preferred lending structure is a senior secured loan with conservatively structured collateral and ratio covenants. However, in select cases Schulze Global may consider convertible debt instruments, bridge loans, and mezzanine financing. All Schulze Global loan recipients are subject to rigorous due diligence and must meet strict screening standards. For its debt products, the firm focuses on the same sectors as its private equity platform.

Funds

Mongolia

Schulze Global runs the Schulze Global Mongolia Debt Facility (SMDF), a partnership between Schulze Global and the U.S. government’s Overseas Private Investment Corporation (OPIC) for the purpose of making loans to small- and medium-sized enterprises in Mongolia. SMDF has made loans across a variety of sectors, including financial services, manufacturing, construction, and building materials.

Portfolio

Fuji-Altai is a roofing and construction company and the exclusive Mongolian distributor of Firestone roofing materials, which are known for their superior durability. The company has also undertaken a number of high profile construction projects across Mongolia.
citi
Citi Institute is a Mongolian higher education institution focused on design, performing arts, cosmetology, and management disciplines. The institute is most recognized and sought after due to its specialized programs and offers a variety of undergraduate and graduate degrees.
Bandia is an Ulaanbaatar-based builder and property developer specialized in residential and social infrastructure development and interior remodeling. The company’s latest project is a development of 55 residential buildings for 138 households in the southern province of Mongolia, Omnogobi.
Capital Market is one of the leading food distribution companies in Mongolia with long-standing relationships with Tyson poultry, Dole bananas, and McCain French fries among others. The company is diversifying its product range to meet the increasingly sophisticated consumption patterns and tastes of local consumers.