Key Takeaways
- • Stratus Alternative Fund, managed by NCB Capital Markets, is launching the Stratus SME Private Equity Fund with the Development Bank of Jamaica (DBJ) as the fifth portfolio in its alternative investment suite.
- • The fund will be seeded with a minimum of J$3 billion, with the DBJ contributing J$1 billion in seed capital, targeting small- and medium-sized entities (SMEs) primarily in Jamaica.
- • The fund will operate on a ten-year life cycle, with investor principal and gains returned according to the partnership agreement, following a competitive selection process initiated by the DBJ in December 2021.
- • According to Simone Hudson, AVP Alternatives & Fund Management at NCB Capital Markets, the fund addresses SME financing challenges while building an ecosystem of expert support for portfolio company development and management.
- • The launch is positioned to provide early-stage equity participation in SME growth, leveraging demonstrated success from Jamaica's junior market as evidence of value creation potential in SME equity investment.
Summary
Stratus Alternative Fund, the alternative investments platform managed by NCB Capital Markets, has partnered with the Development Bank of Jamaica to establish a dedicated private equity fund targeting small- and medium-sized entities in Jamaica. The Stratus SME Private Equity Fund represents the fifth addition to Stratus's portfolio of specialized investment vehicles, which currently include infrastructure- and tourism-focused funds.
The partnership commits the DBJ to provide J$1 billion in seed capital, with the fund seeded to a minimum of J$3 billion overall. The fund operates under a ten-year investment lifecycle, after which all investor principal and accrued gains will be returned in accordance with the partnership agreement. The DBJ selected Stratus as fund manager through a competitive proposals process launched in December 2021, with evaluation criteria including the manager's experience, demonstrated knowledge of SME-specific financing needs and solutions, and the soundness of its strategic and governance framework.
Simone Hudson, AVP Alternatives & Fund Management at NCB Capital Markets, characterized the initiative as addressing a significant market gap. "Stratus is here to help them along their journey by not only providing funding but also building out the ecosystem of experts that will aid in the development of the companies and their principals," Hudson stated. The fund manager emphasized that the investment thesis benefits both SME borrowers, who face substantial financing constraints, and institutional investors seeking early-stage equity participation. Hudson cited the performance track record of Jamaica's junior market as validation that equity investment in SMEs generates competitive risk-adjusted returns for investors.
The launch underscores institutional recognition that Jamaica's SME sector remains underserved by traditional financing channels. By combining DBJ capital with Stratus's investment expertise and post-investment operational support infrastructure, the fund targets the dual objectives of capital formation for underfinanced enterprises and return generation for institutional and retail investors seeking alternative investment exposure.
The partnership commits the DBJ to provide J$1 billion in seed capital, with the fund seeded to a minimum of J$3 billion overall. The fund operates under a ten-year investment lifecycle, after which all investor principal and accrued gains will be returned in accordance with the partnership agreement. The DBJ selected Stratus as fund manager through a competitive proposals process launched in December 2021, with evaluation criteria including the manager's experience, demonstrated knowledge of SME-specific financing needs and solutions, and the soundness of its strategic and governance framework.
Simone Hudson, AVP Alternatives & Fund Management at NCB Capital Markets, characterized the initiative as addressing a significant market gap. "Stratus is here to help them along their journey by not only providing funding but also building out the ecosystem of experts that will aid in the development of the companies and their principals," Hudson stated. The fund manager emphasized that the investment thesis benefits both SME borrowers, who face substantial financing constraints, and institutional investors seeking early-stage equity participation. Hudson cited the performance track record of Jamaica's junior market as validation that equity investment in SMEs generates competitive risk-adjusted returns for investors.
The launch underscores institutional recognition that Jamaica's SME sector remains underserved by traditional financing channels. By combining DBJ capital with Stratus's investment expertise and post-investment operational support infrastructure, the fund targets the dual objectives of capital formation for underfinanced enterprises and return generation for institutional and retail investors seeking alternative investment exposure.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.