Emerging Markets: Leapfrog closes US$700m impact fund

Andrew Kuper, founder and CEO of LeapFrog Investments

Specialist investor Leapfrog Investments has announced the largest-ever private equity fund by a dedicated impact fund manager, surging past its US$600m target to reach US$700m. The new fund invests in healthcare and financial services companies – tapping into the demand from billions of emerging consumers in Asia and Africa.

“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 CEO of LeapFrog Investments.

LeapFrog has invested in 26 businesses to date. They have grown at an exceptional rate of nearly 40% a year on average from the time of investment. LeapFrog companies now reach 168 million people across 35 countries with healthcare or financial services. Over 136 million of those individuals are emerging consumers – defined by The World Bank as living on under US$10 a day. Most are accessing quality insurance, savings, pensions, credit, remittances, medicines or healthcare services for the first time.

LeapFrog’s new fund has already made five investments: WorldRemit is the leading digital remittances provider globally. NeoGrowth provides innovative unsecured-credit products to micro, small and medium enterprises across India. Goodlife Pharmacy chain is now the largest provider of healthcare services in East Africa. Pyramid Pharma is a distributor of medicines and diagnostic and surgical equipment across Africa. And Ascent Meditech manufactures and delivers orthopaedic products across India that help avoid crippling pain. These businesses use innovative marketing or distribution via mobile phones to reach millions of customers not well-served by conventional companies.

This is LeapFrog’s third fund. Investors include global insurers Admiral, AIG, AXA XL, Everest Re, Hannover Re, Prudential Financial, QBE and Zurich as well as leading pensions and asset managers such as Ascension Capital, TIAA-Nuveen (USA), Kempen, Partners Group Impact, as well as Christian Super and HESTA (Australia).

The new fundraise takes LeapFrog to US$1.6bn of total commitments, sustaining its position as the largest private equity manager entirely dedicated to impact investing.