Want to Change the World?  Here Are Ten Frontier Investors Making the Biggest Impact 1
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It’s the new tech boom.

Impact investing – ventures aimed at shaking up society and the environment – are building assets fast. So, who’s the Uber of the frontier? Here are 10 of the biggest investors funding innovation to change the developing world.

 

1. LeapFrog Investments

 LeapFrog sprung to life after five founders led by Andrew Kuper and Jim Roth trundled around Europe in a Volvo, knocking on doors with their mantra of “profit with purpose.”

Winning over the likes of George Soros and JPMorgan, they have lived up to their name. LeapFrog has become the first impact equity investor to top $1 billion.

The financial services companies it funds have an impact on over 50 million lives across Asia and Africa, and provide jobs for more than 90,000.

Successes include Express Life, a Ghanaian insurer that offers health, life and funeral cover to individuals and families living on less than $2.50 a day, and Apollo Investments, a similar micro-insurer in Kenya, Tanzania and Uganda.

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Having sold stakes in both companies, LeapFrog is now focusing on healthcare, with investments typically ranging between $10 million and $50 million apiece.

LEAPFROG’S LOG:

Asset class: Private equity
Geographic focus:
Africa & Asia

Sectors: Microfinance, low-income financial services & micro-insurance

Assets under management: $1 billion

Africa Water

2. Vital Capital Fund

 Here’s another name to match its portfolio. Vital recently invested $21.9 million in Water For All, a project to provide at least 640,000 people in remote areas of Angola with access to clean, purified drinking water.

Founded by Israeli Air Force pilot-turned-entrepreneur Eyte Bitte, Vital closed its first fund in 2011. The military connection extends to Vital’s advisory board, whose members include retired General Wesley K. Clark, who commanded all NATO forces during the Kosovo war.

Vital’s battle plan: “No trade-offs” between beneficial social impact and investment.

Its single biggest venture is a $92 million investment in Kora Housing, which is building 40,000 integrated and affordable homes for communities in Angola in partnership with the government.

VITAL STATISTICS:

Asset class: Private equity

Geographic focus: Mainly Sub-Saharan Africa

Sectors: Urban community housing, agriculture, healthcare, renewable energy, water & education

Assets under management: $350 million

 

3. Bamboo Finance

Again, the clue is in the name. Bamboo is about protecting the environment. Its “cleantech” portfolio includes Greenlight Planet – a for-profit company that has sold more than 3 million solar lamps to over 8 million users in India and Sub-Saharan Africa. Greenlight’s sales have doubled in each of the last three years.

Photovoltaic energy brought in a small village of Mali in the Dogons Land
Photovoltaic energy brought in a small village of Mali in the Dogons Land

The brainchild of Jean-Philippe de Schrevel, Bamboo has reached over 16 million people in low-income communities across the frontier world and created at least 20,000 jobs.

The company – located in Luxembourg, Geneva, Bogota, Nairobi and Singapore –splits its $250 million-plus of assets into two global funds, covering 30 emerging and frontier markets across Latin America, Africa and the Asia Pacific region.

BAMBOO ROOTS:

Asset class: Private equity

Geographic focus: Latin America, Africa, Asia Pacific

Sectors: Cleantech, sustainable agriculture, low-income financial services, microfinance & micro-insurance

Assets under management: >$250 million

 

4. Sarona Asset Management

Named after the biblical Plain of Sharon, the Sarona fund is a spinoff from the Mennonite Economic Development Associates. MEDA, as this international development organization is more commonly known, dates back to 1953, when a group of business partners came together to invest in a Paraguayan dairy business, the Sarona Dairy.

Today, Sarona’s investments include Khyati Foods, a Mumbai-based producer of organic cotton and soybeans for export to Europe and North America. Khyati buys its ingredients from 10,000 certified organic smallholders across India. Its farmer training and certification enables farmers to increase output and achieve higher pricing for their products.

Founding CEO Gerhard Pries has focused Sarona’s projects on countries with GDP per capita between $500 and $12,000.

SARONA PERSONA:

Asset class: Private debt & private equity

Geographic focus: Latin America, Africa, Asia Pacific

Sectors: Cleantech, affordable housing, community development, education, sustainable agriculture, entrepreneur development, media & tech

Assets under management: $180 million

 

5. Root Capital

Founder William Fulbright Foote worked as a journalist in Mexico and Argentina, and as a banker for Lehman Brothers in Latin America, before finding his mission in Root Capital.

His plan: tackling rural poverty by filling the “missing middle” of agricultural finance. In this “middle” are companies whose capital needs are too large for microfinance, yet too small, risky or remote for commercial banking.

An example is C.A.C. Chirinos, a Peruvian coffee cooperative with over 600 member farms. With Root funding, this cooperative based in the Cajamarca region is able to sell its premium coffee to specialty buyers in the US and Europe.

Environmentally vulnerable areas of Latin America and Africa are the primary focus for the not-for-profit social investment fund.

ROOT FOUNDATIONS:

Asset class: Private debt & private equity

Geographic focus: Latin America, Africa, Asia Pacific

Sectors: Natural resources & conservation, sustainable agriculture, entrepreneur development

Assets under management: $100-249 million

 

6. Aavishkaar Venture Management

 India’s fastest growing portable toilet company is among the recipients of “social venture capital” from Aavishkaar. The impact goes far. Saraplast’s toilets help to tackle one of the country’s biggest health challenges – lack of access to hygienic sanitation. It also provides a lifeline for rural women whose lack of toilet privacy can be a contributing cause of sexual abuse.

saraplast

Since being founded in 2001 by Indian social entrepreneur Vineet Rai, Aavishkaar has gone on to close five funds with more than US$200 million under management.

Underserved regions of India, Indonesia, Bangladesh, Sri Lanka and Pakistan are at its core.

AAVISHKAAR VISION:

Asset class: Private equity

Geographic focus: Asia Pacific

Sector focus: Education, water, sanitation, health, sustainable agriculture, microfinance, low-income financial services, micro-insurance

Assets under management: >$200million

 

7. Accion

After travelling around Latin America, Berkeley law student Joseph Blatchford founded Accion in 1961. Initially focused on volunteer projects, Accion went on to become one of the pioneers of microfinance, issuing its first micro-loan in 1973.

Since then, it has helped to build 63 microfinance institutions in 32 countries, reaching millions of customers.

An example is Azimo, a company that assists expatriates making remittances to poor families. Azimo enables low-cost transfers using any device in over 190 countries. Users can receive cash through agents, bank accounts, m-wallets (including M-Pesa), bill pay, air-time or cardless ATMs.

ACCION ASSETS:

Asset class: Private debt & private equity

Geographic focus: Latin America, Africa, Asia Pacific

Sectors: Affordable housing, community development, education, entrepreneur development, microfinance, low-income financial services, micro-insurance, media & tech.

Assets under management: $100-249 million

 

8. Grassroots Capital Management

Among Grassroots’ investments is Micro Housing Finance Corporation. The company helps secure home loans for those excluded from financial services because they work outside of the formal sector in India.

Paul DiLeo worked with the U.S. Treasury and Federal Reserve Bank of New York before founding Grassroots to offer microfinance equity. Since the late 1990s, the company has collaborated in eight impact funds and managed investments in nearly 20 more.

Headquartered in New York, it focuses on affordable housing and sustainable agriculture across the developing world.

GRASSROOTS BASE:

Asset class: Private debt & private equity

Geographic focus: Latin America, Africa, Asia Pacific

Sectors: Affordable housing, community development, entrepreneur development, microfinance, low-income financial services & micro-insurance

Assets under management: $100-249 million

 

9. Treetops Capital

A recent investment by Treetops is a mushroom compost facility in Romania. By producing compost locally, the company expects to increase the number of mushroom farms in the country and turn Romania into a net exporter of the fungi.

mushrooms

Along with sustainable agriculture, Treetops helps provide environmentally sustainable and affordable housing, and assists microfinance institutions.

Founder Mitchell Lench was previously managing director for the structured finance team at Bank of America’s investment division in London.

TREETOPS VANTAGE:

Asset class: Private debt, private equity & real estate

Geographic focus: Asia Pacific, Eastern Europe & Russia, North America

Sectors: Affordable housing, community development, sustainable agriculture, entrepreneur development, microfinance, low-income financial services & micro-insurance

Assets under management: $100-249 million

 

10. Global Partnerships

Having built 50 microfinance institutions, social businesses and cooperatives in 11 countries across Latin America and the Caribbean, Global Partnerships is looking to make a first foray into Africa.

The Latin portfolio includes BioExport, a Paraguayan agricultural firm that purchases directly from smallholders and cooperatives for export as a way of helping local farmers get higher prices for their produce.

Since its creation in 1994, the not-for-profit group has invested over $170 million in 85 partner organizations.

GLOBAL REACH:

Asset class: Private debt

Geographic focus: Latin America, Africa

Sectors: Cleantech, health, fairtrade, sustainable agriculture, entrepreneur development

Assets under management: $51-99 million

 

The data in this report is sourced from Impact Assets 50, an annual list of impact investment managers compiled by Impact Assets.

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