Global impact investment firm Capria said on Tuesday it has marked the first close of its $100-million emerging markets fund-of-funds after getting commitments from new Limited Partners (LPs) including Vulcan Capital, the investment arm of the late Microsoft co-founder and philanthropist Paul Allen.
Vulcan has committed $20 million to Capria Fund, the investment firm said in a statement. It didn’t disclose the amount at which it made the first close.
In July, Will Poole, managing partner and co-founder of Capria, had told VCCircle that the first close was expected at $45-50 million. At that time, International Finance Corporation (IFC), the World Bank’s private-sector investment arm, had committed.
Other new LPs in the fund are Omidyar Network, Ford Foundation and Resonance Impact Fund, the statement said. The final close is expected next year, it added.
Capria manages multiple investment funds and a global network of impact fund managers. Until last year, US-headquartered Capria had been investing out of a $5.2 million pilot fund.
Some of the backers of the pilot fund included former Infosys finance chief TV Mohandas Pai, Bill Gates Investments, Crystal Springs Foundation, The Lemelson Foundation and Manipal Group’s Ranjan Pai.
Capria Fund makes commitments to funds that are part of the Capria Network, which is akin to a “virtual global investment firm”. It has added 16 funds to date including Unitus Ventures of India.
Capria’s “network fund” model aims to equip local investment teams to be effective in investing in early-stage deals, where there is little investor competition and more deals to choose from.
Investments from Capria Fund
Following the first close, Capria Fund has agreed to invest as an LP in two of the funds that are part of the network -- Adobe Capital and Fen Ventures.
Adobe Capital’s second $40 million fund invests in early-growth of enterprises operating in sectors such as healthcare, education, housing and alternative energy in Mexico and Latin America. Fen Ventures’ $21 million fund invests in early-stage tech and life sciences companies in Chile.
Capria Fund will initially invest $1-5 million in funds in its network, and up to $7 million after the fund’s final close, Poole had said.
Capria’s impact funds are mainly focused on Latin America and Africa at the moment, but it has a strong pipeline for new fund manager partners from Asia including India and Southeast Asia. The investment in funds in Asia is aimed for January-March next year, Poole had said.
With the Capria Fund, the firm is looking to grow its network-wide assets under management (AUM) of $260 million to more than $1 billion over the next two years, advancing a new model to address the $1 trillion “missing middle” investment opportunity.
The “missing middle” investment opportunity is the small and growing businesses in emerging markets that face challenges scaling up, starting with access to sufficient risk capital.
Capria also said that evidence suggests that at a macro level, private domestic consumption in emerging markets shows resilience to US-initiated global economic downturns.
“The same emerging consumer consumption that creates economic resilience in emerging markets also defines the opportunity for businesses in the ‘missing middle’ that are largely deprived of adequate capital,” the statement said.