IFC announced an investment in a new fund by LeapFrog Investments, one of the largest private equity groups dedicated to impact investing in emerging markets, to improve fast-growing health and financial services firms’ access to growth capital and support job creation in Africa, South Asia, and Southeast Asia,
IFC is making a $50 million equity investment in LeapFrog Emerging Consumer Fund IV LP, which targets $1 billion in commitments and will represent the largest offering by LeapFrog to date. IFC’s investment in the fund will be made along with an additional $50 million, which will allow IFC to selectively invest alongside the fund in Leapfrog portfolio companies.
The fund will focus on growing businesses in healthcare and financial services by helping companies adopt digital solutions and offer new products that can reach underserved segments of the population. In addition, IFC will work with LeapFrog to improve gender diversity at the fund manager level and the companies the fund will invest in.
“We are delighted to deepen our relationship with IFC, which shares our ambition to generate life-changing social and environmental impact, as well as robust financial returns, in growth markets”
said Andy Kuper, Founder and CEO of LeapFrog.
“IFC’s support over multiple fund vintages and as a regular co-investor constitutes a powerful endorsement of LeapFrog’s distinctive team and of our Profit with Purpose strategy for accessing opportunities across Africa, South Asia and Southeast Asia. We have established a strong and long track record with IFC, together identifying, building and realizing attractive returns from purpose-driven companies. We look forward to the next 10 years of working together via this new fund.”
The COVID-19 pandemic exacerbated access to capital challenges, especially for mid-cap companies in Africa, South Asia, and Southeast Asia. Private equity can help accelerate the regions’ economic recovery by providing growth capital, especially to mid-cap companies, and helping them adopt professional governance practices.
“The project will support private sector growth in Africa and Asia, bridge the investment gap in healthcare in emerging markets, and further accelerate financial inclusion across these regions,”
said William Sonneborn, IFC’s Global Director of Disruptive Technologies, Creative Industries, and Funds.
“The project will be one of the largest emerging markets-focused funds and will attract other commercial investors to this market segment. It will help boost the competitiveness of Africa and Asia’s private equity markets and demonstrate the attractiveness of investing in businesses that help solve large social problems all while generating market returns.”
This is IFC’s third engagement with the fund manager, following an investment of $20 million in LeapFrog’s first fund and $45 million in its third fund. In addition to its fund commitments, IFC has provided $64 million to five companies backed by LeapFrog’s funds in Africa and Asia, including the largest genomic medicine company focused on emerging markets, MedGenome, and fast-growing Vietnamese bank, HDBank.
For the new fund, IFC is investing alongside the Singaporean sovereign wealth fund Temasek, global insurance strategic investors AIA and Prudential Financial and global asset managers such as Van Lanschot Kempen.
