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MDIF launches private equity impact fund for independent media
New York, February 7, 2019: As illiberal democracies advance around the world and even digital darlings like Buzzfeed, HuffPost and Vice announce lay-offs, a new approach to investing in impactful media is needed.
Recognising that challenging times call for creative solutions, MDIF today announced the launch of Emerging Media Opportunity Fund I (EMOF), the first private equity fund for independent media in countries where access to balanced news and information is under threat.
EMOF has closed at USD12.95m, with international investors including Stichting DOEN, Open Society Foundations (Soros Economic Development Fund), IFU (Denmark’s Investment Fund for Developing Countries) and co-investor JP Politiken Hus, in addition to MDIF. At final close, the fund had already invested approximately USD5m in five companies in India, Indonesia, Brazil and Peru that reach more than 11 million people.
“EMOF is the first private equity fund to provide capital to independent media companies operating in restrictive environments,” said MDIF CEO Harlan Mandel. “The fund seeks to provide social and financial returns to investors by investing in media properties with significant growth potential, built around the principles of high quality independent news and information.”
In many countries, media companies are only able to raise capital from politically compromised sources, which puts editorial independence at risk. EMOF financing will allow companies to invest in the infrastructure and talent necessary to develop robust businesses, while maintaining a commitment to independent and quality journalism.
“The business challenges facing media are well known, but positive financial return opportunities exist in certain markets where democratization, economic uplift, and independent media form a virtuous circle of development, accountability and growth,” said Mr Mandel.
MDIF is committed to ensuring that EMOF has real impact and has tied its profit participation to the social impact of investments. MDIF’s earnings through carried interest is 100% conditioned on meeting a range of mission-aligned indicators, including the level of media freedom in the country at the time of investment, the practical impact of investee news and information throughout the investment, and a mission-aligned exit. The fund has a target IRR of 10.5% for its investors.
Early deals include investments in leading Indian digital news publisher Scroll.in, Indonesia’s path-breaking data-driven business and finance news publisher Katadata, and Colab, a Brazilian platform where citizens can hold local governments accountable.
About Media Development Investment Fund
A New York corporation with principal offices in New York and Prague, MDIF provides equity and debt financing to news and information companies in countries where access to independent media is under threat. Since its founding in 1995, MDIF has provided more than $171 million in affordable financing, including:
- $148 million in loans and equity investments;
- $22 million in technical assistance and other grants;
- Earned over $41.7 million in interest, dividends and capital gains;
- Collected more than $72 million in recovered principal invested.
MDIF has invested in 358 projects for 114 clients across 39 countries, writing off 10.7% of the total loaned and invested.
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