Netherlands based investor company PGGM, which has about €75 billion ($106 billion) of assets under management will invest $60 million in a microfinance private equity fund managed by Grassroots Capital, reports Pionline.com. Grassroots Capital’s Global Microfinance Equity Fund will invest primarily in India, Latin America and Africa.
“In the same way that (major financial institutions globally) have been capital-constrained, the microfinance community is also seeking to bolster its balance sheet,” said Alex van der Velden, head of responsible equity strategies — PGGM .
“We expect microfinance private equity to achieve competitive returns and also generate a social dividend — that makes it attractive as an asset class,” van der Velden added.
Grassroots Capital will invest the amount in countries including India, Latin America and Africa. It has offices in New York, London and Hyderabad.
It is founded by Paul DiLeo, who has 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.
PGGM is a privately owned investment farm and is interested in managing pension funds. It also invests in public and private equity, debt markets, real estate, commodities and infrastructure markets across the globe. Microfinance investments coming to India has seen an upward trend in terms of volumes.
Another limited partner, CDC Group, the UK government-backed fund of funds with net assets of $4 billion, recently invested $30 million in two microfinance funds. CDC has invested $20 million in India Financial Inclusion Fund, which is managed by Caspian Advisors Pvt Ltd. CDC had also put in $15 million in Catalyst Microfinance Investors, which invests in greenfield microfinance institutions in India, Pakistan, Nigeria and Ghana.
Recently, SKS Microfinance, India’s largest microfinance institution, received a strategic investment of Rs 50 crore from insurance firm Bajaj Allianz Life Insurance.
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