LeapFrog raises $700 mn for third impact investment fund

LeapFrog raises $700 mn for third impact investment fund

London-based impact investor LeapFrog Investments said it has received commitments worth $700 million (around Rs 4,900 crore at current exchange rate) for its third fund, topping its initial target of $600 million.

Investors that have made commitments in the new fund include insurers, pension funds and development finance institutions.

Many limited partners from the first two funds have made commitments to the third fund, LeapFrog said in a statement.

The new fund will add healthcare services to its existing focus on financial services. It will tap into the demand from billions of emerging consumers in Asia and Africa, and seek to reach 70 million emerging consumers.

“It is time for a better kind of capitalism. LeapFrog was founded on a philosophy of profit with purpose, rejecting conventional trade-off thinking in financial markets. That has proved a winning strategy, driving strong growth and returns while changing tens of millions of lives,” said Andrew Kuper, founder and chief executive of LeapFrog.

Insurers that made commitments to the third fund include Admiral Group, American International Group (AIG), AXA XL, Everest Re, Hannover Re, Prudential Financial, QBE Insurance Group, and Zurich Insurance.

Pension funds and asset managers that participated in this fund are Ascension Capital, PineBridge Investments, TIAA-Nuveen (USA), Kempen, Partners Group Impact, Stiftung Abendrot and Europe’s SBZ as well as Christian Super and Australia’s Hesta.

Merck & Co., Inc., and foundations including PactWorld, the Ford Foundation and the Rockefeller Foundation as well as development financiers such as Germany’s Deutsche Investitions-und Entwicklungsgesellschaft (DEG), Overseas Private Investment Corporation (OPIC), International Finance Corporation (IFC) and France’s Proparco were other participants.

“OPIC is committed to supporting breakthrough investment in developing countries. LeapFrog is a compelling fund manager and strong partner for deploying capital in successful companies to bring large-scale impact,” said David Bohigian, acting president and chief executive of OPIC. “This will expand the reach of development finance through investments in innovative portfolio companies that will serve millions of new consumers in the developing world,” he said.

Philippe Le Houérou, chief executive of IFC, the private sector arm of the World Bank Group and a lead investor in the new fund, said, “We want to substantially increase impact investing for a sustainable world – so we are delighted to be supporting the largest equity fund by a dedicated impact manager in emerging markets.”

He added, “By investing in this fund, IFC is expanding our long-standing partnership with LeapFrog and together we will drive this investment towards financial inclusion and health access. We want more and more investors that are looking to do well while also doing good.”

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