LeapFrog Investments has raised $700m for the close of its third emerging markets fund, representing the largest ever private equity fund raised by dedicated impact fund manager.
The firm was initially targeting $600m for LeapFrog Emerging Consumer Fund III, but has since surpassed this amount as well as the $400m raised for the vehicle’s predecessor in 2014. This latest fundraise brings Leapfrog’s total commitments to $1.6bn.
The majority of limited partners committed to the fund were previous investors in LeapFrog’s fund series. The investors included pension funds such as Stiftung Abendrot and Christian Super; corporations including the Rockefeller Foundation and Merck & Co, as well as global insurers Admiral, AIG, and Hannover Re, among others. In 2017, Fund III secured a $25m commitment from the World Bank’s investment arm, the IFC.
The firm is set to use Fund III to invest in healthcare and financial services companies located in Africa and Asia. Leapfrog has already tapped the fund to make five investments in companies including global PayTech WorldRemit, Indian SME lender NeoGrowth and East African healthcare provider Goodlife Pharmacy.
The firm will make equity and quasi-equity investments of between $25m and $30m, mainly in the counties of Kenya, Nigeria, Ghana, South Africa, India, Indonesia, the Philippines and Sri Lanka, according to an investment document from IFC.
“It is time for a better kind of capitalism,” said LeapFrog founder and CEO Andrew Kuper. “LeapFrog was founded on a philosophy of profit with purpose, rejecting conventional trade-off thinking in financial markets. That has proved a winning strategy, driving strong growth and returns while changing tens of millions of lives.
“As our third fund and largest fund, it is a decisive demonstration that meeting the real needs of under-served people is great business.”
LeapFrog recently picked up a majority stake in India’s Ascent Meditech, the health company behind the market-leading Flamingo orthopaedic brand.
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