OPIC commits $200m to LeapFrog

This marks the DFI’s single biggest commitment to a PE fund, and the largest commitment to any impact fund in history.

The Overseas Private Investment Corporation (OPIC) will commit up to $200 million to LeapFrog Investments, marking the largest commitment in history to an impact fund, LeapFrog co-founder Jim Roth confirmed with Private Equity International.

He said this commitment will go towards LeapFrog’s Fund III, which is expected to target $800 million and fundraise over the next year.

This commitment also marks OPIC’s single biggest commitment to a private equity fund, and will push LeapFrog’s received capital beyond $1 billion, allowing the firm to become the first billion-dollar fund aimed at equity impact investing.

“It’s been a real coming of age for impact investing,” Roth told PEI. “One of the things LeapFrog is showing is that you don’t have to trade profits and purpose; we’ve shown that very consistently now over the last eight years.”

He added that there is a growing interest in ESG, a lot of which is driven by pressure on pension funds by their members around ESG issues, and concerns surrounding climate change. LeapFrog has seen more than 50 million people benefit through its portfolio companies and 36 million of them are low-income and underserved, he said.

According to OPIC, LeapFrog will invest the capital in financial services and health care companies in Africa and Asia. This strategy allowed LeapFrog’s portfolio companies to achieve 60 percent average revenue growth in 2014.

“LeapFrog’s innovative approach paired with sound commercial performance has helped spark high-impact business activity in emerging markets,” OPIC president and chief executive Elizabeth Littlefield said in a statement.

LeapFrog founder and chief executive Dr. Andrew Kuper called this a “transformative moment for impact investing.”

The firm’s past investors include AIG, JP Morgan, MetLife, Prudential, RGA and TIAA-CREF in the US, and Alliance Trust, AXA, HESTA, Partner Re, Swiss Re, XL Caitlin and Zurich globally.

OPIC, a development finance institution, has committed $4.16 billion in capital to various funds to-date, according to PEI’s Research & Analytics division. Earlier this year, it committed $100 million to Pembani Remgro Infrastructure Fund.

LeapFrog, a growth fund investing in companies in Africa and Asia, follows a motto of “profit with purpose” to maximise both financial and social returns.

Its second fund, LeapFrog Financial Inclusion Fund II, is 75 percent committed and reserved, Roth told PEI.

LeapFrog manages $535 million in assets as of 22 June, according to PEI Research.