Alitheia IDF receives US$10mn commitment from the Soros Economic Development Fund (SEDF)

08 May 2020

The Open Society Economic Justice Program, via its impact investing arm, the Soros Economic Development Fund (SEDF), has committed $15 million to two women-led investment funds that advance economic and gender equity.

These investments—US$10mn in Alitheia IDF and US$5mn in Women’s World Banking Capital Partners II, managed by the nonprofit Women’s World Banking—recognize the power of African women in the informal economy to catalyze change and amplify women’s voices while contributing to their economic empowerment.

These transactions are two of a batch of social impact investments totaling US$33mn that SEDF has made since March, across a range of sectors, including gender, climate adaptation, and human rights.

Alitheia IDF will invest between US$1mn and US$5mn, with the potential for additional funding at a later stage, into small and medium-sized enterprises that present an opportunity to promote gender equality. Investments are made in local currencies across Southern and Western Africa, with a focus on sectors with a high representation of female entrepreneurs and strong prominence of women working in the value chain. These sectors include agribusinesses, consumer goods, and essential services.

Women’s World Banking Capital Partners II will invest, on average, between US$5mn and US$10mn in financial services companies in emerging markets, where one billion women still lack access to formal financial products and services. The fund aims to advance women’s financial inclusion as well as increase gender participation at investee companies. This is the team’s second fund and is a first-of-its-kind blended finance vehicle.

SEDF selected Alitheia IDF Fund and Women’s World Banking Capital Partners II through an open call and competitive process, as part of an effort to identify investment opportunities that honor the power of women in Africa who are working in the informal sector. These two funds not only invest in businesses but are also women-led themselves. This represents SEDF’s second and third investments in women-led teams.

“These investments are coming at a particularly crucial time, as African women—who are a part of the informal economy—are at a heightened risk of economic precarity as a result of the coronavirus pandemic,” said Sarah Hewitt, a program officer with the Open Society Economic Justice Program. “SEDF is also ramping up investment work to directly respond to COVID-19 and has also helped seed an impact investment coordination platform hosted by the Global Impact Investment Network.”

Gender inequality obstructs women’s access to capital and opportunities to earn a decent living. Women-owned enterprises are disproportionately under-funded: 40 percent of Africa's small and medium-sized enterprises are women-owned, yet only two percent of them successfully access finance, resulting in an estimated US$20bn gap of unmet financing need from small and medium-sized enterprises in Africa that are run by women. Similarly, women are widely underrepresented in decision-making positions across global economies, constituting a minority on boards, among chief executive officers and senior managers, and in politics. It is SEDF’s view that women are Africa’s most underutilized assets and that fully empowering women to reach their full potential is key for Africa to reach its own full potential.

Alitheia IDF Fund is a private equity fund managed by a joint venture between two established managers, Alitheia Capital of Nigeria, and IDF Capital of South Africa. It is the first women-led private equity fund in the region. The fund was launched to specifically target gender-diverse and high-growth African small and medium-sized enterprises that improve the lives of women as business leaders, employees, community members, suppliers, and customers, in turn enhancing corporate governance, decision making and innovation across the continent. Headquartered in New York, the Women’s World Banking global team supports the development of female-focused financial services.

SEDF is responding to the COVID-19 crisis by ramping up its investment work in areas that address the plight of the poorest and most marginalized. SEDF and the Open Society Economic Justice Program, of which it is a part, work globally to promote economic systems and practices that build more equitable, sustainable, and democratic societies.

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