LeapFrog to invest in Indonesia's Reliance Capital Management

Reinsurer PartnerRe and Dutch development finance institution FMO - which is contributing $8.2 million - are also participating in the transaction.

Reliance's business covers life and health insurance products, banking and asset management, and it also has a listed securities arm, Reliance Securities. The firm claims to reach 450,000 direct clients.

The investment will be used to help fund Reliance's acquisition of a 40% stake in local lender Bank Kesejahteraan. Leftover funds will be used to improve IT systems in the insurance business and provide financing to the company's multi-finance platform. The intention is that Reliance will eventually be taken public.

"The target for all of us is to, at the right time, take this company to market," Michael Fernandes, LeapFrog's Southeast Asia head, told Reuters. "There's no urgency from an IPO perspective, but the intention is this is a story which we believe the market will appreciate."

A timeline has not been set for the listing but its is likely to take place in Indonesia, he said. Fernandes added that the LeapFrog intends to invest another $100 million in the insurance-related companies in Southeast Asia. According to FMO, less than 19.6% of Indonesians - or 250 million people - currently have a bank account. At the same time, insurance penetration is at just 1.8%.

LeapFrog reached a $400 million close on its second fund in September. Recent investments include: Thailand's Syn Mun Kong Insurance (SMK), in which bought a 21.7% stake in December, alongside Lombard Investments; and Magma Fincorp, an Indian non-banking finance company (NBFC) which raised $80 million from LeapFrog, KKR, and India Value Fund Advisors.

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• Topics
• Financials
• Southeast Asia
• Expansion
• Financial Services
• FMO
• LeapFrog Investments
• Southeast Asia
• Growth capital