Definition

Sub-investments are the investments made by the financial intermediaries (FIs) that the DFI invests in. It is therefore the DFI’s indirect investments. FIs include banks/financial institutions and funds (such as, venture capital funds, private equity funds, and debt funds).

Sub-investments made through banks should qualify for disclosure if the DFI is materially exposed to them and they are:
a) High risk (category A or equivalent), or
b) Larger than thresholds set out in the Equator Principles (version 4).

All sub-investments made through funds (such as, venture capital funds, private equity funds, and debt funds) should qualify for disclosure.

Use of funds is the way in which finance provided to banks/financial institutions is to be used. The DFI should define the sectors included to understand the types of investments that would qualify, e.g. for SME finance (if included).