Top
September 9 2014

LeapFrog fund surges to $400m as global investors lean in

  • LeapFrog Investments has raised US $400m for a new investment fund for emerging Asia and Africa
  • The fund will invest in high-growth companies that provide financial services for emerging consumers
  • These markets are vast and largely unserved
  • Latest investors in the oversubscribed fund include AIG, Alliance Trust PLC, AXA, HESTA, RGA Reinsurance and Zurich Insurance Group
  • The fund is backed by six of the world’s leading insurers, three of the world’s leading reinsurers; and global asset managers, pension funds and development financiers
  • LeapFrog is the world’s largest dedicated equity investor in emerging markets financial services

Tuesday 9 September 2014, London and New York

LeapFrog Investments has raised $400m for a new fund to tap the demand for financial services from 2 billion emerging consumers in Africa and Asia. Investors in the oversubscribed final raise, announced today, include AIG, Alliance Trust PLC, AXA, HESTA, RGA Reinsurance and Zurich Insurance Group. The fund is now backed by six of the world’s leading insurers, three of the world’s leading reinsurers, as well as global asset managers, pension funds and development financiers.

The new fund will invest in high-growth companies providing insurance, saving, pensions and payments in some of the fastest growing markets globally.

“There is a growing realization among global financial institutions that the emerging consumer represents an historic opportunity,” said Dr Andrew Kuper, Founder and CEO of LeapFrog. “People across Africa and Asia are working to achieve security for their families and businesses, but most have yet to reach the middle class. There is an immense demand for transformative financial tools.” LeapFrog’s portfolio companies focus on customers earning under $10 a day, whose collective spending power is forecast to rise to $5 trillion within the coming decade.

Denis Duverne, Deputy CEO of AXA, said, “AXA is committed to offering protection through financial services to emerging market consumers globally, a vast population that will shape the financial services industry in the decades to come. We are proud to support industry pioneer LeapFrog in doing the same.”

LeapFrog is already the world’s largest dedicated equity investor in emerging markets financial services, with partner companies serving 22.7 million people across 16 countries.

Peter D. Hancock, President and Chief Executive Officer of AIG, said, “AIG’s and LeapFrog’s leaders are committed to insurance and investment opportunities that benefit society. We found compelling LeapFrog’s deep experience in meeting the needs of under-served markets, combining capital and operational expertise.”

The new fund will typically make equity investments of $10m to $50m in LeapFrog’s priority markets of Ghana, Kenya, Nigeria, South Africa, India, Indonesia, the Philippines and Sri Lanka. The fund has already made its first landmark investment of $29 million into India’s IFMR Capital, operating in 336 districts across 24 Indian states.

A. Greig Woodring, President and Chief Executive Officer of RGA Reinsurance Company, said, “RGA is particularly interested by innovation in growth markets – the LeapFrog fund is a compelling opportunity to examine new developments in underwriting and distribution.”

LeapFrog’s new fund takes the firm’s investment philosophy of Profit with Purpose to a new scale.

Katherine Garrett-Cox, Chief Executive of Alliance Trust PLC, said, “Our investment in LeapFrog’s Fund II is an example of our determination to focus on responsible investing. It reflects our conviction that it is possible to invest with the dual purpose of delivering a positive social impact to the community and sustainable returns for our shareholders over the long-term.”

Cecilia Reyes, CIO of Zurich Insurance Group, said, “The combination of LeapFrog’s strong investment proposition and the opportunity to help under-served communities access crucial financial services that will help them become more resilient, makes this commitment a perfect fit with our vision of investing to do both well and good.”

The Fund’s investors include Achmea, AIG, Alliance Trust PLC, AXA, CDC, Christian Super, DEG, EIB, FMO, Front Street Re, HESTA, J.P. Morgan, MetLife, Oikocredit, PartnerRe, Prudential Financial, RGA Reinsurance, Swiss Re, TIAA-CREF, XL Group, and Zurich Insurance Group.

“We’re delighted to walk alongside such enduring institutions,” said Kuper. “Together, we are uniquely positioned to seize the opportunity to serve emerging consumers on a world-changing scale.”

“AXA is committed to offering protection through financial services to emerging market consumers globally, a vast population that will shape the financial services industry in the decades to come. We are proud to support industry pioneer LeapFrog in doing the same.”

Denis Duverne, Deputy CEO of AXA