Schroders’ impact investing arm BlueOrchard adds ‘financial inclusion’ growth markets fund
BlueOrchard Finance, the global impact investment manager that is part of the Schroders Group, has launched the BlueOrchard Financial Inclusion Fund, a new private equity strategy aiming to foster financial services to low-income individuals and connect millions of entrepreneurs in growth markets with investors.
The SFDR Article 9 compliant fund – which aims to raise USD300 million – will invest in companies operating in the fields of micro-finance, the financing of micro, small, and medium enterprises (MSME), micro-insurance, and technology.
The new fund – the firm’s second private equity vehicle – builds on BlueOrchard’s experience and track record of more than 20 years of investing in financial inclusion. By leveraging its ‘unmatched’ network, dataset, and sourcing capabilities in emerging markets economies, the firm says the fund will provide expansion capital to leading institutions in some of the fastest growing markets.
“With an active network of over 1,000 financial institutions, deep sector and country expertise, and best-practice impact management framework, BlueOrchard possesses unparalleled visibility and know-how to accelerate financial inclusion whilst generating competitive returns for investors,” said the firm in a statement announcing the fund’s launch.
Philipp Mueller, BlueOrchard’s CEO, commented: “Our latest private equity fund offers investors the opportunity to invest in high-quality institutions, that we have identified during our 20-year journey of driving financial inclusion in some of the fastest growing markets. This strategy enables us to further accelerate the expansion and digitisation of leading financial institutions, while driving the inclusion of millions of entrepreneurs and individuals in the financial system.”
The new vehicle is BlueOrchard’s second private equity fund, having fully deployed a climate insurance-focused private equity strategy earlier this year. The latest launch is targeting to extend financial services to up to more than 30 million low-income individuals and MSMEs, contributing to the achievement of the UN Sustainable Development Goals.
“We see increased interest from investors in financial inclusion and for good reasons: emerging market financial services have been growing strongly for most of the past two decades,” said Felix Hermes, head of private equity and sustainable infrastructure at BlueOrchard.
“This is particularly true for firms that are active in financial inclusion, providing services to previously unserved and underserved populations and businesses. On average the firms in BlueOrchard’s portfolio have grown their assets more than fivefold over the last decade.”
Hermes added: “By providing the expertise and capital for growth, private equity offers excellent access to these predominantly unlisted companies. The fund, managed by a highly experienced team, is well positioned to leverage this potential for impact and return.”
A pioneering impact investor, BlueOrchard is dedicated to generating lasting positive impact for communities and the environment, while aiming at providing attractive returns to investors. The firm was founded in 2001, at the initiative of the UN, as the first commercial manager of micro-finance debt investments worldwide.
Today, the firm offers impact investment solutions across asset classes, connecting millions of entrepreneurs in emerging and frontier markets with investors with the aim to make impact investment solutions accessible to all and to advance what the firm describes as ‘the conscious use of capital’.
BlueOrchard has a sophisticated international investor base and is a trusted partner of leading global development finance institutions. Since inception, BlueOrchard has invested over USD9 billion across more than 90 countries.
According to the firm’s website, around 230 million poor and vulnerable people in emerging and frontier markets had received access to financial and related services with the support of BlueOrchard as of the end of last year.