Temasek agrees $500m tie-up with impact investor LeapFrog
Temasek Holdings has committed $500 million to Asia and Africa-focused impact investor LeapFrong Investments, which will see it participate as an anchor LP in the firm’s future funds.
The Singapore government-controlled investment fund will also take a minority stake in LeapFrog and provide growth capital to support the expansion of the investment team and capabilities. Responsibility for the investment process will remain with the LeapFrog team.
The strategic partnership between the two firms is said to represent the largest-ever commitment to an impact investor.
LeapFrog is already a significant player in the impact space. In 2019, the GP closed its third fund at $700 million, stepping up from $400 million and $135 million in the two previous vintages. LPs include insurers, development finance institutions, the Ford Foundation, the Rockefeller Foundation, Ascension Capital, Partners Group Impact, and Australian pensions Christian Super and HESTA.
The fund – touted as the biggest raised by a dedicated impact manager – primarily targets healthcare and financial services companies in emerging Asia and Africa. Core geographies include South and Southeast Asia and sub-Saharan Africa. It makes investments of $25-30 million.
The bulk of LeapFrog’s current Asia portfolio is focused on India. It includes credit providers Northern Arc Capital and NeoGrowth, rural financial services player Magma Fincorp, microfinance platform Fincare, and genetic diagnostics business MedGenome. Elsewhere in the region, the firm has backed Thai and Sri Lankan insurers Syn Mung Kong and SoftLogic Life, Indonesian financial supermarket Reliance Capital Management, and cross-border insurance technology platform PasarPolis.
“Our partnership with LeapFrog, with its focus on serving underserved markets, underscores Temasek’s commitment to investing for impact, and the contributions these investments make towards shaping a better world for our communities,” said Benoit Valentin, head of Impact investing at Temasek, in a statement.
The Singapore fund launched ABC World Asia, a dedicated impact investment arm, in 2019. A debut fund of A$405 million ($304 million) received commitments from the likes of Temasek Trust, Temasek, Pavilion, Mapletree Investments, Seatown Holdings, Sembcorp Industries, and Singapore Power. ABC’s key target geographies are South and Southeast Asia and China.
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