Unitus Equity Fund Closes Largest Private Global Equity Fund Targeting Microfinance
Omidyar Network, Abacus Wealth Partners among lead investors in $23M Fund that aims to deliver financial and social returns
Redmond, WA–March 26, 2007–The Unitus Equity Fund L.P. (UEF), an equity fund investing in microfinance institutions in Asia and Latin America, today announced that the Fund closed with $23.4 million in committed capital. This makes UEF the largest global equity fund in the microfinance industry to be fully funded with private capital. UEF is an affiliated organization of Unitus, Inc. (www.unitus.com), a social enterprise which dramatically accelerates the growth of microfinance institutions and helps them provide more of the world’s working poor with access to life-changing financial services.
Launched in the spring of 2006, the Unitus Equity Fund is the first 100 percent privately-funded equity fund active in the microfinance industry. The UEF was established to encourage the development of a commercial equity market to serve the rapidly growing microfinance industry. With new capital markets in place, microfinance institutions will have increased access to the funds they need to offer more and better services to their clients. The Fund seeks to earn its investors a return commensurate with risk while simultaneously providing social returns by investing in organizations working to alleviate poverty.
While most microfinance equity funds focus on top-tier, regulated microfinance institutions in Eastern Europe and Latin America, the Unitus Equity Fund targets a broad geographic range, with investments in India, Asia and Latin America. Adopting a venture capital approach, the UEF seeks to invest in younger, growth-oriented microfinance institutions run by visionary, entrepreneurial leaders. Working with a diverse portfolio of microfinance institutions, the UEF encourages pro-growth strategies; the development of new financial services, such as savings and insurance; and the creation of profitable exit strategies–such as an IPO–to attract still more capital to the market.
To date the UEF has made investments in: SKS Microfinance Pvt. Ltd., a microfinance institution helping the rural poor in India, in March 2006; Ujjivan Financial Services Pvt. Ltd., a microfinance institution focused on India’s urban poor, in May 2006; and Credex (Grupo Crediexpress S.A. de C.V.), a microfinance institution in Mexico, in September 2006. Following the March 2007 Fund closing, UEF expects to make five additional investments this year.
Limited partners in the Fund include Omidyar Network, the clients of Abacus Wealth Partners, and Kensington Investments, L.P. The Fund is led by UEF Director Chris Brookfield and advised by UEF Board Chair Geoff Woolley, who together have more than 35 years of experience structuring and executing dozens of private equity and venture capital deals. Ten percent of the Fund’s profit will go to Unitus, Inc. (a 501-c3 nonprofit) to further its work to increase access to microfinance for the world’s working poor.
Said Woolley: “Investing in microfinance institutions makes good economic sense. These small banks that are servicing the poor are growing at triple digit rates. As time progresses, these groups will become a conduit of additional products and services to the developing world populations. The solid financial returns that investors are expecting from our investments reflect optimism in the rapid growth that will result when the poor gain access to more and more economic opportunity. The fact that the Fund was oversubscribed is great validation of our investment strategy and goals.”
“We are very excited that the UEF has raised more than $23 million at its final close,” said Omidyar Network Director of Investments, Jim Bunch. “In working with the Fund over the past year, we have become even more convinced that it will play a catalytic role in helping scale microfinance while providing commercial-level returns for investors.”
“The Unitus Equity Fund shows us that investing in microfinance is not just good for the world but is also an integral part of a well-diversified investment portfolio,” said Brent Kessel, President of Abacus Wealth Partners, a wealth management and financial planning firm which includes socially responsible investments in its clients’ portfolios. “While remaining focused on its social mission the Fund is as rigorous in its methodology and execution as any commercial fund. For our clients looking to make a difference with their investments, it would be hard to find a more impactful choice than the Unitus Equity Fund.”
About the Unitus Equity Fund:
The Unitus Equity Fund L.P. is a $23.4 million equity fund which invests in emerging microfinance institutions in Asia and Latin America. The Fund encourages the development of a commercial equity market serving the microfinance industry. A robust equity market will lower the cost and increase the amount of capital available to the world’s poor, furthering the Fund’s goal of increasing global access to microfinance. Launched in the spring of 2006, the Fund has an investment portfolio of two microfinance institutions in India and one in Mexico. The Fund is affiliated with Unitus, Inc., an innovative microfinance organization based in Redmond, Washington.
About Unitus:
Unitus, Inc. a social enterprise which helps microfinance institutions accelerate their growth, to help more of the world’s working poor gain access to financial services such as microcredit loans, insurance and savings products. Based in Redmond, Washington, with an office in Bangalore, India, Unitus provides technical assistance and financial support, including loans, grants and guarantees, to help microfinance institutions increase their capacity and enhance their ability to reach even more of the world’s working poor. Through its proven microfinance acceleration model, Unitus’s 13 microfinance partners have been able to grow eight times faster than the industry average. The Unitus portfolio of partners is providing economic and social empowerment to more than 1.3 million micro-entrepreneurs and their families in India, Kenya, Mexico, Argentina, the Philippines and Indonesia. For more information about Unitus, please visit: www.unitus.com.