CDC to Boost Microfinance Fund With $30m
Wednesday, October 17, 2007
CDC Group, the UK government-owned emerging markets investor, will today announce it is putting $30m into a new microfinance hedge fund, underlining the increasing commercial interest in microfinance.
The hedge fund, called Minlam Microfinance Offshore Fund, has raised just under $40m, including money from John Muse, founder of Hicks, Muse, Tate & Furst, the US private equity group.
The CDC commitment, by far its biggest investment in microfinance funds, comes amid mounting interest by mainstream business in microfinance institutions that provide very small loans to individuals in developing countries.
The sector was given a further boost last year when the Nobel Peace Prize was awarded to one of its pioneers, Muhammad Yunus.
TIAA-Cref, one of the biggest money managers in the US, has earmarked $100m for investment in microfinance projects and a number of leading financial institutions, including Citigroup, Deutsche Bank and American International Group, have made significant investments.
This year, Sequoia Capital, the Silicon Valley venture capital firm that backed Google, invested $11.5m in SKS Microfinance, an Indian microfinance institution. US-based Unitus Equity Fund, whose partners include the investment company of Ebay founder Pierre Omidyar, has raised $23.4m to invest in microfinance in Asia and Latin America.
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