ABP, a Netherlands-based pension fund, is investing $30 million in Global Microfinance Equity Fund (GMEF), a microfinance private equity fund managed by Grassroots Capital. The investment follows last year’s $60 million capital infusion by another pension fund in Netherlands.
With this, Grassroots Capital has closed the fund at $117.5 million, said a company statement. It plans to invest in around 50 microfinance institutions in different parts of the world from its total corpus. The fund will invest primarily in India, Latin America and Africa.
Grassroots Capital is founded by Paul DiLeo, who has over 10 years of experience in microfinance investing. Prasad Viswanatha, the founder of Caspian Capital Partners, an Indian fund management company and co-founder of The Bellwether Microfinance is a managing partner with Grassroots Capital.
In July last year, GMEF has raised $60 million capital from PGGM, a privately owned investment firm in Netherlands. PGGM also manages pension funds, and invests in public and private equity, debt markets, real estate, commodities and infrastructure markets globally.
“The commitments from both ABP and PGGM, the two leading pension funds in the Netherlands, shows a strong commitment to this growing asset class,” David FitzHerbert, managing partner of Grassroots Capital, said, in the statement.
ABP, which has been investing since 2005, has so far invested $215 million in both equity and debt in several MFI’s globally.
Some recent transactions in microfinance in India include Matrix Partners India’s Rs 100 crore ($23 million) investment in Bhartiya Samruddhi Finance Ltd, and Developing World Markets’s (DWM) Rs 50 crore ($11.5 million) in Smile Microfinance Ltd.
Earlier, CDC Group, the UK government-backed fund of funds invested $35 million in two separate transactions in Indian MFIs. It has invested $20 million in India Financial Inclusion Fund and another $15 million in Catalyst Microfinance Investors.