Weekly Roundup: Big Deals, Big Reports and the Bono Bump
Bamboo Finance and Accion Investments in Microfinance, SPC this announced what they called a “landmark” transaction for the impact investment industry. And based on what I’ve read this week, it’s hard not to see it any other way.
Private equity firm Bamboo Finance will take a controlling stake in Accion’s for-profit equity fund, which for nearly 10 years has provided capital to microfinance institutions.
“This US$105 million transaction is a landmark for the industry” said Jean-Philippe de Schrevel, CEO of Bamboo Finance, “It demonstrates the maturity of the sector and its readiness for private investors.”
Accion says the fund has delivered 15.6% percent internal rates of return to shareholders since 2003. Michael Schlein, President and CEO of Accion, noted that to expand access to the tools of financial inclusion, the firm sought to harness the private capital markets.
“We have much more work to do and today’s transaction demonstrates the power of double-bottom-line impact investing, which is a cornerstone of our strategy,” he said.
Bamboo’s Financial Inclusion fund is the largest microfinance private equity fund with $195M AUM. The Fund acquires minority stakes in their capital while playing an active governance role by sharing international experience, information, networks, knowledge and by taking an active role at a board level. It has played a key role in facilitating the transformation of several microfinance organizations into full-fledged banks providing for the lowest socio-economic segments.
It’s certainly an interesting blend of two distinct models. I’m not entirely sure we’ve seen this in the past, and certainly not to this scale. I could be wrong, but let me know if I am.
McKinsey Highlights Social Finance
Speaking of innovative financing approaches, it’s the subject of the latest volume of Voices on Society from McKinsey & Company. The volume takes a look at how cutting-edge investment techniques and financial instruments are driving social change. The slate of subjects includes diaspora bonds, crowdsourcing, and a concept that was first featured here on NextBillion: micro-equity. Micro-equity offers a path to prosperity for budding entrepreneurs, while providing investors with a more responsible, safer way to leverage their money, writes Mark Wien, the co-founder of the Micro Equity Development Fund.
Check out these essays and more here.
‘Cracking’ the Details
Earlier this year NextBillion was a media partner for Cracking the Nut, an innovative conference that took aim at how investment dollars in rural and agricultural markets can yield more food production for a hungry world that has fewer resources and more challenges – from climate change to water deprivation. (Find a previous NB post on here).
Conference organizers have published a report encapsulating many of these important issues. The report focuses on key discussions, information and details that emerged from the conference’s five themes:
- Expanding to new markets
- Tapping new sources of supply
- Creating effective partnerships
- Making finance work
- Forging positive government support
Download the full report here.
TechnoServe Gets the Bono Bump
It’s exciting to see an organization like TechnoServe and its Uganda Country Director Erastus Kibugu get the credit both are due. I’m sure it’s even more gratifying when it comes from the likes of Bono.
As our content partner notes in a blog post this week, fashion companies Diesel and Edun announced the launch of a new denim collection, Diesel+EDUN, which will be entirely sourced and manufactured in Africa. The cotton will come from farmers in northern Uganda who are participating in the Conservation Cotton Initiative, a program that is helping more than 8,500 farmers to improve their incomes and recover from a prolonged conflict. TechnoServe is implementing the initiative with Edun’s support.
On Friday at the IHT Luxury Conference, in Rome Edun founders Ali Hewson and Bono, Diesel founder Renzo Rosso, and Kibugu discussed the collaboration, which is employing farmers in the Gulu region following more than two decades of civil war.
Check out the video below and more on the project on TechnoServe’s blog.