Emerging markets-focused LeapFrog pulls in over $200m for second fund


frog_lrgEmerging markets fund manager LeapFrog Investments has gathered more than $200m for its second fund after investing almost all of its $135m debut vehicle.

AltAssets revealed in April that Leapfrog was nearing the end of its investment capabilities for Fund I, although president and founder Andy Kuper remained tight-lipped about whether it was marketing a second vehicle.

The new capital will be used to target companies in Africa, South Asia and South East Asia according to the firm, confirming information uncovered by AltAssets five months ago.

Backers for the new fund include MetLife, Prudential, JP Morgan Chase, TIAA-CREF and CDC according to LeapFrog, which said the capital was raised in just eight months.

Many of the LPs were repeat investors from the firm’s debut vehicle, with some doubling or tripling their allocations for the new fund, Leapfrog said.

Kuper said, “The entry of these leading financial institutions indicates the increasing attractiveness of the emerging consumer segment – the millions of people eager to join the middle class but who are not there yet.

“There are 1.9 billion emerging consumers in LeapFrog’s target regions, and their spending power is forecast to rise from $2tn today to $5tn in the coming decade.

“Financial services are crucial springboards for households and businesses, but access is very limited. LeapFrog backs the best companies to serve this vast and untapped market.”

LeapFrog’s previous investments include partnering with brands such as Mahindra IBL and Shriram CCL in India, ARM in Nigeria and Apollo IL in Kenya.

The new fund will aim to make equity investments of up to $60m, and will continue to focus on LeapFrog’s priority markets of Indonesia, the Philippines, India, Sri Lanka, Kenya, South Africa, Nigeria and Ghana.

Leapfrog said financial services growth in these markets in 2012 was on average 17.4 per cent, more than four times nominal global GDP growth, representing a sustained bright spot for emerging markets.

Kuper said, “Crucially, 12 million of the 18 million people our companies have reached so far are emerging consumers, living on less than $10 per day.

“We are demonstrating that smart businesses that provide empowering products actually grow faster and are more competitive than their peers.”

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