In 2012 Acumen raised $10.0 million in philanthropic capital, affirming our strong cash position. In addition, we had non-cash revenue of $3.2 million in donated legal services, primarily to support our investing work, as well as donated office space. We received $1.0 million in interest from portfolio loans, and have a loss provision of $1.4 million for portfolio investment losses, representing a conservative valuation policy. Acumen Fund carries our program investments at cost, and we lower these valuations when impairment exists. We do not mark up our equity investments to fair market value, even when our holdings increase in value in subsequent funding rounds. We only realize gains or profits when we exit an equity investment.
Operating Expenses & Program Investments
Operating expenses cover all the direct costs of running Acumen Fund programs as well as our management and general and fundraising costs. They do not reflect any of our program investments in our portfolio companies. Total expenses for the 2012 year were $12.7 million which was flat compared to the prior year.
Program work constitutes 73% of expenses. Portfolio expenses were $5.9 million, representing the cost of finding, diligencing and executing $12.3 million in new investment approvals as well as managing our active portfolio of 44 companies. Outreach, Impact and Communications expenses were $2.4 million, representing our work in metrics, research, and sharing our insights on patient capital investing. Our Global Fellows program, in its eighth year, had costs of $0.9 million. Fundraising costs and Management and General expense accounted for $3.5 million. These overhead costs continue to be funded entirely by Acumen’s Board of Directors.
Statement of Position
Acumen Fund’s total assets were $103.0 million as of December 31, 2012 which was virtually the same as the prior year. Similar to a venture capital fund that raises cash upfront for a multi-year investing period, we have a strong cash position. $15.0 million of the cash we hold is restricted and designated for a specific use or committed to undisbursed investment tranches. $9.5 million is held as an operating reserve leaving $16.8 million for impact investing in future years or for programmatic spending. Multi-year pledges receivable continue to be collected on a timely basis and converted into cash while being replaced with newer commitments. Acumen grew its portfolio assets by $8.0 million or 22% in 2012 after providing for $1.4 million in potential impairment on older investments.
Total liabilities at the end of 2012 were $6.7 million the majority of which are notes payable by Acumen Capital Markets (ACM) to ACM investors. Net assets at the end of the year were $96.3 million compared to $96.2 million at the end of 2011 – no change.
PDF of audited financial statements for December 31, 2012
PDF of IRS Form 990 for December 31, 2012