LeapFrog closes its biggest deal yet

The emerging markets-focused firm sealed two transactions, including its first from an Africa-focused SMA.

LeapFrog Investments closed two deals in June – including its debut transaction from a separately managed account targeted at African markets.

The “profit with purpose” firm, which is focused on emerging markets and headquartered in Mauritius, invested $180 million in Enterprise Group, a Ghanaian insurance company, according to a statement. This is LeapFrog’s largest investment and the first from LeapFrog Strategic African Investments, a $350 million separately managed account raised to target insurance companies in high-growth African markets.

Prudential Financial is the main investor in that fund, Private Equity International reported.

Around $130 million of the $180 million was used to purchase a stake from Sanlam Emerging Markets Proprietary Limited, a subsidiary of South African investment manager Sanlam Group. It is using the proceeds of the sale to grow an existing holding in Saham Finances, a Moroccan insurance company, according to Sanlam.

Enterprise Group offers insurance, life cover and pensions. It has more than $50 million in premiums and reported a 26 percent compound annual growth rate in premiums between 2013 and 2015, according to LeapFrog partner Stewart Langdon. Only around 5 percent of Ghanaian adults have some form of insurance and the market is growing at 30 percent a year, according to the World Bank.

In mid-June, LeapFrog also partnered with Omidyar Network, an investment firm run by eBay founder Pierre Omidyar, to acquire a stake in financial technology provider Cignifi.

Cignifi runs a big data platform that carries out credit scoring based on non-financial data, allowing people without bank accounts to access credit. It does this mainly by analysing mobile phone data, such as ingoing and ongoing calls and texts, the amount of time a person spends at home or in work and interactions with other lenders.

McKinsey and the International Finance Corporation estimate that the unmet need for credit among emerging markets businesses alone is worth at least $2.1 trillion.