First and foremost 'LVEAC' will be investing in projects and companies capable of generating a minimum ‘Internal Rate of Return’ of 40% p.a. in local currency. This will not, however, prevent ‘LVEAC’ from investing in projects which do not achieve the targeted IRR of 40% but nevertheless are highly cash generative.

By the same token the use of local currency as the base currency allows 'LVEAC' to invest in projects that would generate lower returns if denominated in other currencies. The expected appreciation of the USD, EUR and GBP against the local currency will compensate for this lower growth. Specifically projects in the fields of real estate, tourism and some facets of education and telecommunications where income and in some cases expenditure are expressed in USD will be of interest.

Growth Potential

The whole region offers significant growth potential because of the lack of foreign investment other than in Government and NGO sponsored projects or in public services. It will therefore be the task of the 'LVEAC' management team to find projects that offer the necessary growth potential in order to generate the expected returns.

Contribute to the Development of Uganda and Eastern Africa

By investing in the region 'LVEAC' will support the growth of the region’s broader economic base by creating additional and better job opportunities and further staff development in the lower, middle and higher management of the businesses it invests in.

Environmentally Responsible

The involvement of the aid agencies has created awareness for the environment within the countries of the region and agencies such as ‘NEMA’ (National Environmental Management Agency) are playing a big role in ensuring that all new investments are respecting the environment for the benefit of future generations. It will be the task of 'LVEAC' to work within the framework provided and only invest in companies that respect ‘NEMA’ rules and regulations.

Leverage and Opportunity to Expand into Other African Countries

The existence of the East African Union (Uganda, Kenya and Tanzania) and the plans to include Burundi and Rwanda in the Union is opening up avenues for 'LVEAC' to expand within the region without the normally expected red tape when going cross border. 'LVEAC' has a unique access to know-how and expertise and each potential investment will include the consideration of portability into the other countries of the region.

Investment Horizon and Ownership Stake

As a rule 'LVEAC' will be looking at being minority shareholders in companies it invests in, with a stake between 15-35% and a holding period of 3-5 years. Some investments may need to be more substantial and especially new projects will be analysed as to ascertain whether a higher stake might be necessary in order to best protect 'LVEAC' investors. Over time 'LVEAC' will build a core management team ensuring sufficient manpower to manage the different investments.

Exit

Any investment decision will be taken based upon the principals discussed above and with an exit strategy being a significant part of the decision process and agreements with partners.