UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND

Financial Trends

Organization Details

UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND, founded in 1994, is a mid-sized nonprofit in the International Affairs sector that reported $23.3M in total revenue in fiscal year 2023. Revenue fell 83% from the prior year — a significant decline worth monitoring. The organization ran a surplus of $7.2M, a strong 31% operating margin.

Mission

IN FISCAL 2023, BASED ON APPROVAL BY THE BOARD OF DIRECTORS, THE FUND INITIATED THE PROCESS OF CHANGING ITS LEGAL NAME TO UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND. THIS CHANGE WAS RECORDED IN THE DELAWARE SECRETARY OF STATE'S CERTIFICATE ISSUED IN OCTOBER 2023. IN JANUARY 2024, USAID ISSUED GRANT MODIFICATION #27 CONFIRMING THE CHANGE OF CORPORATE NAME. THE NEW NAME WILL REFLECT THE FUND'S ACTUAL HISTORICAL AND ONGOING OPERATIONS IN UKRAINE AND MOLDOVA, AND INCLUDES THE COUNTRIES OF OPERATION, CONSISTENT WITH THE PRACTICE OF OTHER USAID-SPONSORED ENTERPRISE FUNDS. ORGANIZATION MISSION - THE UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND (THE "FUND") IS A NOT-FOR-PROFIT CORPORATION FORMED PURSUANT TO THE SUPPORT FOR EAST EUROPEAN DEMOCRACY ACT OF 1989 (THE "SEED ACT") AND THE 1992 FREEDOM FOR RUSSIA AND EMERGING EURASIAN DEMOCRACIES AND OPEN MARKETS SUPPORT ACT (THE "FREEDOM SUPPORT ACT"). UMAEF'S PRIMARY PURPOSE IS PROMOTING THE DEVELOPMENT OF THE PRIVATE SECTOR, AND THE POLICIES AND PRACTICES CONDUCIVE TO SUCH DEVELOPMENT, OF THE WESTERN NIS REGION (THE "REGION"), WHICH CONSISTS OF UKRAINE, AND MOLDOVA. THE U.S. CONGRESS AUTHORIZED APPROPRIATIONS OF $150 MILLION, WHICH WERE COMMITTED BY THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT ("USAID") FOR UMAEF PROGRAM PURPOSES AND ADMINISTRATIVE EXPENDITURES (THE "GRANT"). AMOUNTS RECEIVED FROM USAID WERE CONDITIONED UPON UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUNDS' COMPLIANCE WITH THE REQUIREMENTS OF THE GRANT AGREEMENT WITH USAID AND THE SEED AND FREEDOM SUPPORT ACTS, WHICH IMPOSED CERTAIN U.S. POLICY OBJECTIVES AND REPORTING OBLIGATIONS. UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND IS ENGAGED IN A BROAD PRIVATE INVESTMENT PROGRAM IN THE REGION WHICH, THROUGH EQUITY INVESTMENTS, LOANS, LEASES, TECHNICAL ASSISTANCE AND OTHER MEASURES, EMPHASIZES A COMMITMENT TO SMALL-AND MEDIUM-SIZED PRIVATE BUSINESSES. UMAEF PROVIDES TECHNICAL ASSISTANCE TO COMPANIES IN WHICH IT HAS INVESTED. THROUGH ITS DIRECT ROLE IN INVESTMENTS IN THE REGION'S PRIVATE SECTOR, UKRAINE-MOLDOVA AMERICAN ENTERPRISE SEEKS TO GENERATE PROFITS THAT WILL FURTHER SUPPORT ITS ACTIVITIES AND ATTRACT INVESTMENTS BY OTHERS. AS PART OF ITS INVESTMENT OPERATIONS, UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND MAY OBTAIN REPRESENTATION ON MANAGEMENT AND SUPERVISORY COUNCILS OF INVESTEE COMPANIES. UKARINE-MOLDOVA AMERICAN ENTERPRISE FUNDS' GRANT AGREEMENT WITH USAID STATES THAT THE SUCCESS OF UMAEF WILL BE CHARACTERIZED BY THE EXTENT TO WHICH IT CAUSES OR CONTRIBUTES TO: (1) THE SUCCESSFUL ESTABLISHMENT, OR STRENGTHENING OF, A WIDE ARRAY OF SMALL AND MEDIUM-SIZED FIRMS ACROSS THE DIFFERENT SECTORS OF THE ECONOMIES IN THE UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUND REPUBLICS; (2) THE GENERATION OF NEW EMPLOYMENT OPPORTUNITIES IN THE PRIVATE SECTOR OF THE WESTERN NIS REPUBLICS; (3) INVESTMENT BY OTHER PRIVATE COMPANIES IN SECTORS WHERE UMAEF TOOK AN INITIAL LEAD; (4) THE COMPLETION OF A WIDE ARRAY OF TRANSACTIONS THAT DEVELOP AND STRENGTHEN FINANCIAL MARKETS IN THE WESTERN NIS REPUBLICS; (5) DEVELOPMENT BY UMAEF OF A NUMBER OF KEY JOINT VENTURES BETWEEN PRIVATE COMPANIES OF THE U.S. AND THE WESTERN NIS REPUBLICS; AND (6) CONSISTENT WITH UMAEF'S SOUND BUSINESS JUDGMENT, THE CONDUCT OF ACTIVITIES INTENDED TO FURTHER INVESTMENT IN EACH OF THE WESTERN NIS REPUBLICS. ONE OF UKRAINE-MOLDOVA AMERICAN ENTERPRISE FUNDS' KEY ACCOMPLISHMENTS WAS FULFILLING THE DIRECTIVE FROM USAID TO ENABLE THE ESTABLISHMENT OF A PRIVATE SUCCESSOR FUND, EMERGING EUROPE GROWTH FUND LP (EEGF). A NEW PRIVATE INVESTMENT MANAGEMENT COMPANY, HORIZON CAPITAL ASSOCIATES LLC (HCA), WAS FORMED TO SUPPORT EEGF AND UMAEF. THIS APPROACH FOLLOWED THE PRECEDENT OF USAID-FINANCED ENTERPRISE FUNDS IN CENTRAL AND EASTERN EUROPE, WHICH SUCCESSFULLY ATTRACTED SIGNIFICANT PRIVATE CAPITAL. BASED ON USAID AND CONGRESSIONAL APPROVAL, UMAEF'S BOARD OF DIRECTORS COMMITTED $25 MILLION TO EEGF AND APPROVED THE SALE OF CERTAIN INVESTMENTS TO EEGF IN 2006. EEGF NOW FUNCTIONS AS A MID-CAP PRIVATE EQUITY FUND MAKING INVESTMENTS IN UKRAINE, MOLDOVA, AND BELARUS. UMAEF IS A CORNERSTONE LIMITED PARTNER IN EEGF. EEGF HAS INVESTED BETWEEN $5 TO $25 MILLION IN EXPANSION AND BUY-OUT OPPORTUNITIES IN THE FOLLOWING INDUSTRIES: FINANCIAL SERVICES, FAST MOVING CONSUMER GOODS, RETAIL AND INDUSTRIAL GOODS. USAID HAS ALREADY DISTRIBUTED THE FULL GRANT OF $150 MILLION TO UMAEF, WITH THE FINAL TRANCHE RECEIVED IN FISCAL YEAR 2007. ACCORDING TO THE GRANT AGREEMENT, USAID MAY ESTABLISH THE DATE AFTER WHICH UMAEF SHALL COMMENCE THE WINDING UP OF ITS AFFAIRS AND SALE OF ITS ASSETS. UNDER THIS AUTHORITY, USAID ORIGINALLY ESTABLISHED UMAEF'S TERMINATION COMMENCEMENT DATE AS AUGUST 26, 2009. DURING FISCAL YEAR 2009, UMAEF REQUESTED AND WAS GRANTED AN EXTENSION FROM USAID OF THE TERMINATION COMMENCEMENT DATE TO AUGUST 26, 2011. IN JANUARY 2011, USAID FURTHER EXTENDED THIS DATE TO AUGUST 26, 2013 WITH THE CONDITION THAT THE LEGACY PROPOSAL BE PRESENTED TO USAID BY AUGUST 26, 2011. THE LEGACY PROPOSAL SET FORTH UMAEF'S PROPOSAL FOR THE ESTABLISHMENT OF A LEGACY FOUNDATION TO BE FUNDED BY PROCEEDS DERIVED FROM THE SALE OF ASSETS. THE FUND'S PROPOSAL WAS SUBMITTED TO USAID AS REQUIRED, INCLUDING CONFIRMATION THAT AS OF AUGUST 26, 2011, UMAEF WILL NOT MAKE ANY NEW INVESTMENTS OR COMMITMENTS, ALTHOUGH THE FUND MAY MAKE FOLLOW-ON INVESTMENTS IN COMPANIES IN ITS EXISTING PORTFOLIO UNTIL AUGUST 26, 2013. THE REVISED TERMINATION COMMENCEMENT DATE. IN JUNE 2013, USAID ESTABLISHED A TARGET LIQUIDATION DATE OF AUGUST 26, 2016 AS THE DATE BY WHICH THE FUND MUST HAVE COMPLETED THE WIND-UP AND LIQUIDATION OF ALL OF ITS ASSETS. THE GRANT AGREEMENT BETWEEN UMAEF AND USAID WAS AMENDED TO REFLECT THIS TARGET LIQUIDATION DATE OF AUGUST 26, 2016 AND FURTHER STATED THAT THIS DATE MAY ONLY BE EXTENDED WITH THE PRIOR WRITTEN APPROVAL OF USAID. EFFECTIVE JANUARY 28, 2015, USAID APPROVED THE FUND'S PROPOSAL TO CONTINUE THE MISSION OF THE FREEDOM SUPPORT ACT OF 1992 AND THE FOREIGN ASSISTANCE ACT OF 1961, THROUGH THE EXISTING UMAEF STRUCTURE. AS SUCH, THE GRANT AGREEMENT WAS AMENDED TO CHANGE THE TERMINATION COMMENCEMENT DATE FROM AUGUST 26, 2013 TO DECEMBER 31, 2017 AND CHANGE THE TARGET LIQUIDATION DATE FROM AUGUST 26, 2016 TO DECEMBER 31, 2018 TO ALLOW THE FUND TO CARRY OUT THE PROGRAM ACTIVITIES DESCRIBED IN ITS PROPOSAL. THE TLD MAY ONLY BE EXTENDED WITH THE PRIOR WRITTEN APPROVAL OF USAID. THE FUND'S PROPOSAL ENVISIONED A $30 MILLION THREE-YEAR LEGACY PROGRAM FUNDED BY A PORTION OF THE REFLOWS EARNED BY THE FUND FROM ITS INVESTMENT ACTIVITIES. THE GOALS AND OBJECTIVES OF THE LEGACY PROGRAM ARE TO ASSIST UKRAINE AND MOLDOVA WITH FURTHER DEVELOPMENT OF SOUND ECONOMIC POLICIES AND LEADERSHIP DURING THIS CRITICAL TIME IN THEIR RESPECTIVE HISTORIES. BOTH UKRAINE AND MOLDOVA RECENTLY SIGNED DEEP AND COMPREHENSIVE FREE TRADE AGREEMENTS (DCFTA) WITH THE EUROPEAN UNION (EU) AND MUST NOW UNDERTAKE SIGNIFICANT CHANGES TO THEIR ECONOMIC POLICIES AND TO BUILD CADRES OF WELL-TRAINED LEADERS TO FULLY BENEFIT FROM THE DCFTA. THE FOUR PROGRAMS SET FORTH IN THE FUND'S PROPOSAL TO USAID FOCUS ON I) MOBILIZING CAPITAL TO ADDRESS COMPLEX SOCIAL ISSUES (IMPACT INVESTING PROGRAM); II) DEVELOPING INNOVATIVE MARKET-BASED SOLUTIONS LINKING LOCAL GOVERNMENT AND THE BUSINESS COMMUNITY TO IMPROVE THE PROVISION OF SERVICES TO CITIZENS WHILE SUPPORTING THE SME SECTOR (LOCAL ECONOMIC DEVELOPMENT PROGRAM); III) INVESTING IN PEOPLE TO BROADEN AND DEEPEN THE HUMAN CAPACITY NECESSARY TO ADVANCE PRIVATE SECTOR DEVELOPMENT IN UKRAINE AND MOLDOVA (ECONOMIC LEADERSHIP PROGRAM); AND IV) IMPROVING THE ABILITY OF UKRAINIAN EXPORTERS TO ACCESS NEW MARKETS (EXPORT PROMOTION POLICY PROGRAM). EFFECTIVE APRIL 14, 2016, USAID ADDITIONALLY MODIFIED THE GRANT TO CHANGE THE TERMINATION COMMENCEMENT DATE FROM DECEMBER 31, 2017 TO DECEMBER 31, 2022 AND CHANGE THE TARGET LIQUIDATION DATE FROM DECEMBER 31, 2018 TO DECEMBER 31, 2023. THE TARGET LIQUIDATION DATE MAY ONLY BE EXTENDED WITH THE PRIOR WRITTEN APPROVAL OF USAID. THE AMENDED GRANT AGREEMENT ALLOWS THE FUND: I) TO DISBURSE $5 MILLION TO MAKE NEW INVESTMENTS AND COMMITMENTS IN UKRAINE AND MOLDOVA TO ENCOURAGE THE CREATION AND EXPANSION OF SMALL AND MEDIUM ENTERPRISES (SMES); II) TO APPLY AN ADDITIONAL $5 MILLION FOR ITS LEGACY PROGRAMS, THEREBY INCREASING TOTAL ALLOWABLE FROM $30 MILLION TO $35 MILLION; III) TO COMMIT $30 MILLION OF PROGRAM INCOME AS ANCHOR INVESTOR, ON PARI PASSU TERMS WITH PRIVATE INVESTORS, IN THE EMERGING EUROPE GROWTH FUND III, L.P., A U.S.-DOMICILED FUND LAUNCHED BY HORIZON CAPITAL THAT RAISED $200 MILLION AFTER FINAL CLOSING TO PROVIDE LOANS, EQUITY AND FINANCIAL SUPPORT TO SMES IN UKRAINE AND MOLDOVA.

Program Service Accomplishments

Financial Overview (2023)

Year-over-Year Comparison

Governance

Special Practices & Reported Activities

Compensation of Officers, Directors & Key Employees

Historical Data