IFC has made a US$50 million equity 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.
LeapFrog invests in healthcare, financial services and climate solutions businesses in high-growth global markets. Its companies deliver distinctive impact and robust returns, growing on average 24 per cent a year. LeapFrog companies now reach 392 million people in 30 countries.
IFC, a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets, is making a US$50 million equity investment in LeapFrog Emerging Consumer Fund IV LP, which targets US$1 billion in commitments and will represent the largest offering by LeapFrog to date. 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.
IFC’s investment in the fund will be made along with an additional US$50 million, which will allow IFC to selectively invest alongside the fund in Leapfrog portfolio companies. This is its third engagement with the fund manager, following an investment of US$20 million in LeapFrog’s first fund and US$45 million in its third fund.
The latest 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 realising attractive returns from purpose-driven companies. We look forward to the next 10 years of working together via this new fund.”
William Sonneborn, IFC’s global director of disruptive technologies, creative industries, and funds, said the project would 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.
“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,” he said.
