LeapFrog Investments is set to receive up to US$200m from the Overseas Private Investment Corporation, the OPIC Board of Directors announced today. This is the largest commitment in history to any impact fund manager. It also brings commitments to LeapFrog to over 1 billion USD, heralding the arrival of the first billion-dollar group dedicated to equity impact investing.
LeapFrog plans to invest the capital in financial services and healthcare companies, in both Africa and emerging Asia. By focusing on these underserved markets, LeapFrog portfolio companies recorded a 60% average revenue growth last year, and now serve 51.8 million people.
Elizabeth Littlefield, President and CEO of OPIC, said “LeapFrog’s innovative approach paired with sound commercial performance has helped spark high-impact business activity in emerging markets. Today millions more people across the developing world have access to financial tools, and tens of thousands have jobs because of fast-growing companies supported by LeapFrog. I look forward to the results of OPIC’s support to this exciting fund manager.”
Leading US investors in LeapFrog’s funds to date include AIG, J.P. Morgan, MetLife, Prudential Financial, RGA, and TIAA-CREF. Global investors in LeapFrog include Alliance Trust, AXA, HESTA, Partner Re, Swiss Re, XL Catlin and Zurich.
Many sophisticated investors are joining the move towards what LeapFrog terms “profit with purpose” investment strategies. U.S. pension plans and endowments in particular saw a recent shift in U.S. policy to enable them to consider a wider range of investment opportunities, combining financial reward and impact.
“This commitment marks a transformative moment for impact investing,” said Dr. Andrew Kuper, Founder and CEO of LeapFrog. “OPIC’s vision and capital are a magnet for other leading institutions, revealing how to invest in companies that reach billions of underserved consumers. The greatest financial and social opportunity of our era is to serve these real needs, tapping vast new markets, and achieving profit with purpose.”
The World Bank estimates that over 4 billion people worldwide are earning under $10 per day Purchasing Power Parity (PPP). This population is rising toward the middle class, but lacks access to essential financial tools and healthcare services.
Recognizing the power of the private sector to serve these needs, development finance institutions including the EIB, IFC, FMO, KfW/ DEG and Proparco were all early investors in LeapFrog.
OPIC’s historic commitment to LeapFrog marks a new level of recognition for the private sector as a source of social change. Since launching with President Clinton in 2009, LeapFrog has emphasized the need for scale and strong returns in impact investing.
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