Elena Pons took the helm of MCE’s portfolio team as chief investment officer (CIO) on April 25. Elena, who worked with MCE from 2013–2020, has an extensive background in managing investment portfolios across financial services and sustainable agriculture in emerging markets. With more than 20 years of experience in debt investments, including seven years with MCE managing impact portfolios in Latin America, Africa, and Asia, she is excited for the opportunity to lead the team and drive MCE’s investment strategy in a rapidly changing world.
We had the opportunity to sit down with Elena and discuss her take on how the world is changing and what that means for MCE, as well as her vision for the portfolio team moving forward.
This interview has been edited for length and clarity.
MCE: Hello, Elena. How have the first couple of months back at MCE been?
Elena: The first few months have been interesting. I came back to something very familiar, at the same time, very different. The first difference is obvious — I have a new role on the team! I am no longer the owner of a few portfolio relationships as I was in my previous role. Instead, I am responsible for the portfolio team and the vision and strategy of the entire portfolio. I’m also part of the executive team, which makes a huge difference; particularly right now as we’re preparing to launch the new fund. As a result, my scope of work has widened significantly.
The second difference is the company I am returning to. MCE has evolved tremendously in the last two years. Under the guidance of our CEO and the rest of the executive team, new positions have been created and filled, processes have been tightened, and governance has been strengthened. I came back to an MCE with a more solid structure, ready to scale to the next level.
And the third difference is more personal. When I worked for MCE previously, I didn’t have kids. At that time, MCE was my family and the people I spent most of my time with, and I traveled very often for work. Now with two small children, in my new role I can focus on setting the strategy and support the team as they travel and meet with our portfolio companies on the ground. MCE has always been very accommodating to staff needs, but the all-women leadership team currently in place influenced my decision to come back as there is even stronger support for work-life balance.
The world has been changing rapidly in the last few years. How do you anticipate the portfolio and team adjusting to these changes?
The world is always changing, and there will always be crises. COVID was obviously very difficult for our portfolio and disbursements decreased because we had to operate 100% remotely — but in the last two years, we’ve been able to help our clients restructure their loans according to their needs. I think the main impacts of that crisis are behind us now and it has been eye-opening to see the resilience of the companies we support.
We are also now entering a new territory of high inflation, raising interest rates, and the effects of the war in Ukraine. These are all new risks to take into consideration while we structure deals. Each structure is designed based on two variables: clients’ needs and downside protection. We are dedicated to working with our clients to understand their business cycles and how these crises affect their businesses. The team is continuously trained to be able to offer a product that meets the clients’ repayment terms while ensuring MCE’s investment is protected.
Are you seeing any positive or hopeful takeaways?
Our portfolio companies have demonstrated incredible resilience over the past two years. Their survival and, in many cases, their growth proves that we can continue investing despite the challenges. In fact, 2022 will be a record year for disbursements at MCE — with 81% of disbursed amounts going to existing clients. And, most importantly, despite global shocks, MCE’s investments continue to generate financial returns and positive social and environmental impact.
Aside from global shocks, we’ve seen clients go through regional and national challenges, giving us further confidence in their resilience. Clients in Nicaragua survived the 2011 No Pago Movement that impacted the microfinance market, and the 2018 uprising. Sierra Leone had the Ebola crisis in 2014. In 2015 Azerbaijan’s currency plummeted losing 100% of the value against the USD in 10 months. We have served clients in conflict areas like Myanmar, Ethiopia, and Sri Lanka. Companies have also survived earthquakes in Ecuador and hurricanes in Central America. They’re small companies, and they’re very fragile in that regard. But at the same time, it’s incredible what they’ve been able to endure, while still generating positive impact for their clients and stakeholders. More than anything, crises and set-backs reinforce the need for impact investors to lean in during crises and keep providing much-needed capital to help companies weather the challenges. I’m proud to see MCE in this category of investors that walk the talk.
While we know it’s still early days, can you share any short- or long-term goals you have for MCE’s portfolio and investment strategy?
The first goal is to continue staffing the portfolio team. As a growing and dynamic institution, we are constantly looking for top-talent and we know there’s no shortage of people looking for job opportunities in this sector. Nonetheless, hiring the right folks takes time and intention, and continuing to optimally staff our team is incredibly important for MCE to scale.
Number two is to increase efficiencies in our processes. Historically, we’ve had an “artisanal” way of investing. It works, but it’s very time-intensive. We need to invest in our investment processes. We want to keep the same type of rigor and analysis that we’ve always had, but as we grow our impact, we need to become more efficient in how we make investment decisions.
MCE: Last question: What are you excited about in this new position?
I am excited about MCE’s growth plans! And the opportunity to be a part of us scaling — working alongside some of the best team members, collaborators, advisors, guarantors, lenders, loan committee members and, of course, our board.