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April 28 2015

LeapFrog, FMO and Partner Re invest in Indonesia’s Reliance

  • LeapFrog Investments, FMO (the Dutch development bank) and PartnerRe, today announce that they have jointly invested Rp 562 billion (USD 45m) in leading home-grown Indonesian financial services company, Reliance Capital Management (“Reliance”)
  • Reliance is a rapidly growing financial services group, and recently announced an investment in BKE Bank, a general bank with a focus on improving access to financial services
  • The investment will be accompanied by extensive injections of expertise, aimed at further accelerating Reliance’s growth
  • The investment will help to boost Reliance’s reach into Indonesia’s rapidly growing emerging middle-class, who have limited access to essential financial tools

Jakarta, Indonesia – 28 April 2015

LeapFrog Investments, FMO (the Dutch development bank) and PartnerRe, today announce that they have jointly invested Rp 562 billion (USD 45m) in leading home-grown Indonesian financial services company, Reliance Capital Management.

Reliance is a diversified financial services company that includes Indonesia’s fourth largest group health insurer, a listed top-5 retail securities arm, fast growing life insurer, operations in general insurance, and multifinance and asset management companies. The company has 750,000 individual end-customers, and a wide range of local and global institutional clients. It recently announced an investment in BKE Bank, a general bank with a focus on improving access to financial services. LeapFrog Investments is the world’s largest private equity investor in emerging markets financial services; this announcement follows a recent investment in SMK, a fast growing Thai insurance company. FMO is the Dutch development bank, managing some EUR 8 billion in assets. PartnerRe is a leading global reinsurer, based in Bermuda. The transaction has been structured to provide investors with a significant minority stake in the business.

Reliance President Director and Founder Anton Budidjaja, said, “This investment is a vote of confidence in Reliance’s strategy, and also in the direction and potential of the Indonesian financial services industry. We believe that LeapFrog, FMO and PartnerRe will bring exceptional insight and skills to building our business. We are excited to be working with them to extend the industry’s reach to Indonesians who have not yet had the benefit of essential financial tools.”

LeapFrog Partner and SE Asian head, Michael Fernandes, commented, “We are exceptionally positive about the quality of the team at Reliance, and its ability to address the enormous opportunities in the Indonesian market. This investment, our first in Indonesia, will allow us to participate in one of the world’s most exciting economies, and in a country which is becoming increasingly attractive for investors. As it grows, so consumers will have greater need for financial services: Reliance is poised to meet that need.”

FMO’s CIO Linda Broekhuizen said: “This facility will assist Reliance in expanding its role in the financing of Indonesia’s rapidly growing emerging middle-class, contributing to job creation in Indonesia.”

Chai Phrompechrut, Head of Private Equity at PartnerRe, said, “Anton and his team have built an exceptional platform and we are delighted to partner with LeapFrog and FMO to further solidify Reliance’s position as a leading diversified financial services conglomerate in Indonesia.“

Indonesia’s emerging middle class is expected to grow to 140m in the next 10 years. Insurance penetration is low, at around 2.1% of GDP (compared to greater than 4% in neighboring Singapore, Malaysia, and Thailand). The life insurance sector in Indonesia is projected to grow at over 20% pa over the next 5 years, while general insurance is projected to grow at 15% pa over the same period. Health insurance is projected to grow at 12% pa through the next 5 years.

Indonesia has one of the fastest expanding and healthiest banking sectors in Southeast Asia. However, financial access is low compared to other Asia-Pacific countries, with just 36% of adults having an account with a financial institution in 2014, versus 78% and 81% in Thailand and Malaysia, respectively.

Said Budidjaja, “Reliance is well positioned to serve the emerging Indonesian consumer across their financial services needs, as the demand for essential financial tools and products continues to expand rapidly.”

“We believe that LeapFrog, FMO and PartnerRe will bring exceptional insight and skills to building our business. We are excited to be working with them to extend the industry’s reach to Indonesians who have not yet had the benefit of essential financial tools.”

Anton Budidjaja, President Director and Founder, Reliance Capital Management