Pioneering Impact Investment Fund Delivers Over 15 Percent Returns
Luxembourg/Boston, MA, November 15, 2012-Bamboo Finance, a global private equity group specializing in microfinance and financing social entrepreneurship, announced today that it has acquired a controlling interest in Accion Investments in Microfinance, SPC, a private, for-profit equity fund that has provided capital to microfinance institutions (MFIs) since 2003.
“This US$105 million transaction is a landmark for the industry” said Jean-Philippe de Schrevel, CEO of Bamboo Finance, “It demonstrates the maturity of the sector and its readiness for private investors.”
Accion International (‘Accion’), a global non-profit, launched Accion Investments in 2003 as a for-profit entity to provide commercial capital to MFIs working in challenging markets where such funding was typically unavailable. Over its 10-year life, the Accion Investments fund has returned 15.62 percent Internal Rate of Return to shareholders through its socially-responsible impact investments
“As the sponsor of this fund, we are thrilled by its great results,” said Michael Schlein, President and CEO of Accion. “Our vision is to build a financially inclusive world where everyone has access to financial tools that can improve their lives. To achieve this vision, we must harness the private capital markets and that is the significance of AINV’s success. We have much more work to do and today’s transaction demonstrates the power of double-bottom-line impact investing, which is a cornerstone of our strategy.”
The institutions represented in the AINV fund collectively served a total of 386,000 borrowers and 245,000 depositors. Today they’re reaching almost 1 million borrowers and 1.2 million depositors who might otherwise have had no access to financial services.
“This demonstrates the strength of the investments, while at the same time helping people living in poverty to improve their lives through microfinance,” Mr de Schrevel said.
Bamboo’s Financial Inclusion fund is the largest microfinance private equity fund with $195M AUM. The Fund acquires minority stakes in their capital while playing an active governance role by sharing international experience, information, networks, knowledge and by taking an active role at a board level. It has played a key role in facilitating the transformation of several microfinance organizations into full-fledged banks providing for the lowest socio-economic segments.
Accion Investments has holdings in Microfinance Institutions in Latin America, including Banco Popular of Honduras, Paraguay’s Banco Vision and Mibanco of Peru. These investments represent significant stakes in mature MFIs in the region.
Accion Investments’ less mature investments, primarily in sub-Saharan Africa, have been purchased jointly by Bamboo and Accion’s Gateway fund, and include shareholdings in Nigeria’s Accion Microfinance Bank; EB-Accion Savings & Loans in Ghana; and EB-Accion Microfinance in Cameroon. In addition, Gateway has purchased the AINV shares in BancoSol in Bolivia, and Akiba Commercial Bank in Tanzania.
“This transaction complements our portfolio of investments,” added Xavier Pierluca, Chief Investment Officer of Bamboo Finance. “We are excited to provide continuity to the project alongside Accion, and to further the financial inclusion work of MFIs that are positioned for solid growth well into the future. Many of these MFIs, as well as our current portfolio companies, have moved well beyond Microfinance 1.0, starting to offer micro-insurance and remittance services while still growing at a fast pace.”
Accion will continue to invest in MFIs as part of its overall strategy, which is centered on helping to build the next generation of top-tier MFIs, using impact investing to help push the frontiers of microfinance beyond MFIs, and on helping to build a stronger industry with high standards.
“When we launched the fund, 90 percent of its capital was public money,” said Enrique Ferraro, managing director of Accion Investments. “Today, 90 percent of it is private. That’s attributable to the fund’s return, which we believe is a significant achievement for socially-responsible investing. By attracting private capital to MFI funding, we furthered our vision of building a financially inclusive world.”
About Bamboo Finance
Bamboo Finance, based in Luxembourg, is a commercial investment firm managing US$ 250m, and represents a unique portfolio of direct investments around the world. Bamboo has offices in Bogota, Singapore, San Francisco, Luxembourg and Geneva, and specializes in the financing of global entrepreneurship. It uses a market-oriented approach to deliver social value, environmental value and financial returns to investors. For further information, visitwww.bamboofinance.com.
About Accion Investments in Microfinance, SPC
Accion International, a global non-profit 501c3, created Accion Investments in Microfinance, SPC, a for-profit entity, in 2003 to provide equity capital to microfinance institutions (MFIs). Accion Investments’ investors include both multi- and bi-lateral governmental entities, as well as private investors from the United States and Europe. A seven-member board of directors nominated by its largest shareholders governs Accion Investments.
Accion is a global nonprofit dedicated to building a financially inclusive world, with access to economic opportunity for all, by giving people the financial tools they need to improve their lives. A world pioneer in microfinance, over the last 50 years Accion has helped build 63 microfinance institutions in 31 countries on four continents. Those institutions are currently reaching millions of clients. The Accion U.S. Network is the largest microfinance network in the country and, since inception, has served hundreds of thousands of clients with loans and support. Accion’s Gateway Fund is an equity fund that enables the nonprofit to invest in emerging partner institutions. The fund currently holds shares in MFIs in Bolivia, Brazil, Colombia, China, Haiti, India, Mexico, Nicaragua, Panama, Paraguay, Peru and Venezuela. For further information, visitwww.accion.org.
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