India's Lok seeks $200m for Fund IV, gets AIIB support
Indian impact investor Lok Capital has secured USD 25m from Asian Infrastructure Investment Bank (AIIB) for its fourth private equity fund. The target is USD 200m.
Lok launched the fund in November 2018, initially seeking USD 150m. A first close of USD 90m case last December with contributions from Evolvence India and Switzerland-based Blue Earth Capital.
LPs also include development finance institutions FMO of the Netherlands, BII of the UK, and DFC of the US. Their Austrian counterpart, OeEB, which has backed previous vintages, is also said to have contributed.
Lok launched its first fund in 2006 with USD 22m in commitments from BII, FMO, and the likes of Accion International, the International Finance Corporation (IFC), Developpement International Desjardins, KfW, and ResponsAbility. Fund II raised USD 65m in 2012, while Fund III closed on USD 88m in November 2017.
AIIB described its commitment as its first pure impact investment in India and complementary to a growing exposure to traditional private equity funds. The firm defines its mandate as infrastructure and “other productive sectors,” including a spectrum of PE-targeted industries that support national economic growth. Its commitment to Lok includes a co-investment sleeve of up to USD 5m.
“Green and technology-enabled infrastructure in India is at a crucial juncture, and it is essential to mobilise capital towards new, innovative and scalable businesses across the financial services, climate, health, and agriculture sectors and value chains”, Urjit Patel, a vice president at AIIB, said in a statement.
Lok made at least 37 investments with its first three funds and took five companies public. It has a strong focus on financial services and financial technology, with its portfolio said to serve more than 23m borrowers across India, of which 89% are women.
The GP also invests in agriculture, healthcare, and climate-related technologies, especially at the earlier stages. Its healthcare investments are said to have treated some 922,000 patients, mostly in lower-tier cities and rural areas. This is in addition to helping 36,000 farmers improve their livelihoods.
Fund IV will invest in early and growth stage companies that promote development impacts, reduce greenhouse gas emissions as well as incorporate gender interventions across the investment process. AIIB said it would help mobilise additional capital and support the fund’s tech-enabled infrastructure initiatives.
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