UK-based Social Finance to raise $2b for India impact investing

The two vehicles, India Impact Fund of Funds (IIFF) and India Education Outcomes Fund (IEOF), are targeting $1 billion each. IIFF will raise $600 million from return-seeking investors including corporations, endowments, and high net worth individuals, with the remainder to be sourced from grantors and non-profit organizations. These investors will be charged fees and expenses but will accrue profits only after Social Finance has achieved returns from the fund.

Social Finance has also named Govind Sankaranarayanan, former COO of Tata Capital, as CEO of an Indian entity tasked with managing the funds. IIFF will invest in select debt funds providing financing to MSMEs in target sectors including agriculture, clean energy, healthcare, affordable housing, and financial inclusion. It is targeting a return of 10-11% over a maximum fund life of 12 years.

IEOF plans to make direct investments in programs that improve numeracy and learning outcomes for children in grades one to three, provide technology-enabled interventions for older children, raise the high school completion rate for girls, and enable successful transitions from schools to the workforce. Investments are expected to come mainly from the Indian government and development finance institutions.

Impact funds are attracting a growing level of interest from both institutional investors and global PE firms. The likes of TPG Capital and Bain Capital have launched specialized vehicles focused on transactions that can both deliver attractive financial returns for their LPs and help to address global social and environmental challenges. TPG’s impact vehicle, The Rise Fund, raised $2.1 billion last year; its investments in Asia include Indian dairy firm Dodla Dairy.

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• Topics
• South Asia
• Fundraising
• GPs
• Venture
• India
• Impact investment
• Education