Bamboo Finance has held a first close on $31 million for its second fund that invests in financial institutions that target areas excluded from global financial services. Bamboo Financial Inclusion Fund II, which received commitments from TIAA-CREF, invests in financial institutions that target micro-enterprises, SMEs, low income segments and mobile money operators primarily in Africa, the Middle East, Asia and Latin America.
Bamboo Finance, a private equity firm specializing in investing in business models that benefit low-income communities in growth markets, today announced the first close of $31 million in its second financial inclusion focused fund with investments from Teachers Insurance and Annuity Association of America (TIAA-CREF) and AXA-IM.
The Bamboo Financial Inclusion Fund II will make equity investments in the capital of banks and financial services companies targeting microenterprises, SMEs, the low and lower middle income segments as well as mobile money operators, correspondent banking businesses in growth markets where there remains significant exclusion from formal financial services globally in Africa, the Middle East, Asia and Latin America.
Over the last seven years Bamboo Finance has built one of the largest and most diversified portfolios of financial inclusion private equity investments; representing 31 companies, 22 countries, $195 million and a track record of successful exits.
“Our investment strategy for Financial Inclusion Fund II will leverage our experience, networks and proprietary pipeline to deliver attractive financial returns to our investors while enabling the low-income segments and MSMEs to access high quality and affordable financial services with a focus on increasing access to savings products,” said Xavier Pierluca, Chief Investment Officer, Bamboo Finance.
Microfinance institutions have translated lessons from the past decade into a diversified market of attractive investment opportunities with high quality loan portfolios, low levels of leverage, efficient operations and increasing interest from a variety of buyers including regional and international banks. Regulation has also accompanied this growth in most markets leading to improved governance. “These factors along with mobile technology adoption and new channels such as correspondent banking inspired the creation of the Bamboo Financial Inclusion Fund II. Microfinance has developed a lot over the last decade and is ready for the next generation of growth,” added Jean-Philippe de Schrevel, Chief Executive Officer, Bamboo Finance.
Social performance management has also evolved with an expanding group of initiatives including the Social Performance Task Force and the Smart Campaign in which Bamboo Finance is an active supporter and participant. These initiatives have contributed to the development and dissemination of best practices, standards and social performance reporting as well as client protection principles ensuring that clients are the driving force of the industry.
“TIAA-CREF is pleased to invest in the Bamboo Financial Inclusion Fund II through our General Account Social Impact Investment portfolio for which financial inclusion is a global focus. Our investment helps provide for a commercially viable and sustainable means of delivering financial products, such as credit and savings vehicles, to low income and underserved populations in emerging markets around the world,” said Rekha Unnithan, Director of Impact Investing within TIAA’s Responsible Investment team. “Like TIAA-CREF, Bamboo is a signatory to the Principles for Investors in Inclusive Finance, a best practice framework for responsible investment in this sector and an important factor in our investment decisions.”
Bamboo Finance began its journey in 2007 with the vision that through strong values and sound business principles, we would lead a major transformation to more efficient and inclusive capital markets for social and environmental change. We are one of the leading commercial private equity investment managers in financial inclusion and more broadly social impact. We manage one of the largest specialized private equity funds in microfinance. We expect to maintain our leadership in a sector that is evolving and represents a large opportunity for a team of optimists committed to being a driving force that can lead to large-scale system change globally.
“AXA Investment Managers is excited to be a cornerstone investor in Bamboo Financial Inclusion II. We believe that Bamboo Finance is a best-in-class financial inclusion investment manager with a demonstrated commitment to achieving financial returns and a positive social impact that is actively measured,” said Vincent Gradt, Head of Impact and Thematic Investing, AXA Investment Managers.
About Bamboo Finance
Bamboo Finance is a commercial private equity firm specializing in investing in business models that benefit low-income communities in emerging markets with offices in Luxembourg, Geneva, Bogota, Nairobi and Singapore. Bamboo Finance uses a market-oriented approach to deliver social and environmental value and provide attractive financial returns to investors. To date, we manage 280M USD; representing three global funds and a combined portfolio of 46 investments operating in 30 emerging market countries. Bamboo has a track record of demonstrated commercial returns, and a portfolio of investments that have provided 16 million clients with access to services and created more than 20,000 jobs.