Temasek commits $ 500 million to impact investing specialist LeapFrog
Temasek, the $ 214 billion Singapore state-backed investment firm, has allocated $ 500 million to Leapfrog Investments in partnership that marks largest single commitment to an investment manager specialized impact.
Institutional investors are increasingly interested in strategies that combine attractive financial returns with specific social or environmental objectives. So-called “impact investing” assets reached an estimated $ 715 billion at the end of 2019, according to the Global Impact Investing Network, an industry organization. Temasek’s investment represents the biggest commitment to date in a specialist impact manager, according to GIIN.
“There is an urgent need to address the critical social and environmental challenges facing the world. We believe in the potential of impact investing to unlock the capital needed to meet these challenges, ”said Benoit Valentin, Head of Impact Investing at Temasek.
Temasek hopes its engagement will encourage other large institutional investors to engage in impact investing. He also intends to make additional allocations to other managers specializing in impact investing.
The $ 500 million committed by Temasek brings the total capital raised by LeapFrog since its inception in 2007 to more than $ 2 billion.
At first, LeapFrog focused on financial services and then expanded into healthcare. He owns WorldRemit, a fast growing cross-border digital payment company, and Goodlife, one of the largest pharmacy chains and healthcare providers in Africa.
The companies supported by LeapFrog employ more than 130,000 people and provide health care or financial services to 212 million customers.
“About 4 billion people around the world, half of humanity, do not yet have access to high quality health care or the financial tools they need to thrive. Our ambition is to reach 1 billion customers by the 2030s, ”said Andy Kuper, CEO of LeapFrog.
LeapFrog will primarily use Temasek’s money as a core investment to create new funds. Temasek will also acquire a minority stake in LeapFrog.
Kuper said a growing number of institutional investors are now drawn to the combination of “profit and purpose” offered by impact strategies.
“The dam has burst and I expect to see more institutional investors committing at least $ 1 billion in impact investing. I don’t expect this record to last very long, ”he said.
Prudential Financial, the US insurance group, has invested more than $ 2 billion in impact investing, focusing part of the capital on reviving the area around its headquarters in Newark, New Jersey.
Zurich Insurance has built a $ 5.4 billion impact investing portfolio that includes green bonds, social and sustainability bonds, private equity funds active in areas such as financial inclusion and clean tech , as well as loans for infrastructure projects such as wind or solar farms.
TPG, the Texas-based private equity manager, has raised $ 5 billion for impact investments focused on education, financial inclusion, health and clean energy.
KKR, the New York-listed private equity manager, raised $ 1.3 billion last year for its first global impact fund that will focus on climate change, water and sanitation, workforce development and infrastructure.
“Top investors prioritize measurable impact alongside financial returns, demonstrating that each can improve the other,” said Amit Bouri, Managing Director of Global Impact Investing Network.