Belgian impact fund focused on the Indian rural economy hits first close of USD 60 M
A group of international investors announce the successful first closing of the Incofin India Progress Fund (IPF) with USD 60 million of commitments. The fund will make private equity investments in the Indian agri food value chain and in financial inclusion for rural entrepreneurs in India. The committed capital comes from a diverse set of private and institutional investors including Korys, CDC, Proparco, the Belgian Investment Company for Developing Countries (BIO), the SDG Frontier Fund, the King Baudouin Foundation and several Belgian family offices.
India as an impact investment destination holds great promise. It is a country with an aspirational, young population (86% of the population is younger than 55 years) focused on enriching their lives through hard work and entrepreneurship. At the same time, the country faces serious challenges like inequality (gender, education, family wealth) and a lack of technology, organised supply chains, and access to capital. Although 65% of India’s population lives in rural areas, private equity investments have largely focused on urban companies. As a result, many budding entrepreneurs fail to realise their full potential.
The India Progress Fund (‘IPF’) will support these promising entrepreneurs and increase their chances of success through patient capital, mentoring and access to a global network. IPF will focus on two sectors which make the deepest social impact in the Indian context - financial inclusion and the agri-food value chain.
The agri-value chain is an under-invested sector in India with great potential for modernization, rural impact and for creating meaningful enterprises.
Rahul Rai, Partner Incofin IM
The complexity of the financial inclusion and the agri-food value chain sector have somewhat deterred equity investors. Through its sector-focused approach and international experience in these sectors, IPF intends to bridge this gap and contribute to a vibrant private equity ecosystem.
Incofin IM also benefits from a decade long strong Indian footprint with successful growth capital investments through its local teams in Chennai and New Delhi. Korys, the family office of the Colruyt family, a leading food retailer in Europe, is an expert in the operational food value chain with over 50 years of retail industry experience. Korys has significant downstream experience in the agri-food sector and will provide additional support for networking with European retailers and consumer markets.
Besides Korys, the first closing of the India Progress Fund also brought together other investors with high impact mandates, including CDC, Proparco, BIO, the SDG Frontier Fund and King Baudouin Foundation amongst others. IPF hit USD 60 million in commitments at this first closing, and the intention is to achieve total capital commitments of USD 80-100 million in subsequent closings.
I am positive that with the broad exposure of Korys and the in-depth experience of Incofin, this collaboration will make a significant impact in small and medium enterprises.
Hari Subramanian, Partner India of Korys
“Over the last 13 years of being present in India, Incofin has first-hand practical rural market experience. Success from microfinance shall be carried forward to the large unmet missing middle. IPF shall back entrepreneurs aiming to challenge the status quo, in the process to transform from informal to formal market setup.” - Aditya Bhandari, Partner Incofin IM.
Loïc De Cannière, founder and chair Incofin IM: “We are convinced that strategic partnerships between large corporates with a genuine focus on sustainability and impact fund managers backed by investors with an impact mandate are the way forward to achieve tangible impact on the ground.”
Hari Subramanian, Partner India of Korys: “Korys sees a good match in the objective of the India Progress Fund with our principles of sustainability. For a vast population in India that still has no access to basic financial services, this fund can make a meaningful difference in the lives of the farmers and rural entrepreneurs and bring a substantial improvement of the agri food value chain. I am positive that with the broad exposure of Korys and the in-depth experience of Incofin, this collaboration will make a significant impact in the small and medium enterprises.”
“Eradicating hunger and malnutrition,” according to Luuk Zonneveld, CEO of BIO, “is one of the great challenges of our time. So, in order to feed a growing world population and to contribute to food security, especially of the poor, BIO is a dedicated investor in agriculture, agro-industry, and agroforestry. BIO supports a whole range of entrepreneurs along the complete agriculture value chain, from producers to consumers. This has the extra benefit of creating jobs and kick-starting the economy. That is why BIO gladly participated in this newly created India Progress Fund.”
About Incofin Investment Management
Incofin Investment Management is an independent emerging markets focused impact investment fund manager, focused on financial inclusion, the agri-food value chain and safe water, driven by a purpose to promote inclusive progress. Incofin IM is an AIFM licensed fund manager and has over EUR 1 billion in assets under management. Incofin has a team of more than 70 professionals spread over its headquarters in Belgium and local investment teams in India, Colombia, Kenya and Cambodia.
As a leading impact investment firm, Incofin has invested (via equity and debt financing) over EUR 2.7 billion in more than 320 investees, financial institutions and SMEs in the agri-food value chain, across 65 countries in Asia, Africa, Latin America and the Caribbean and Eastern Europe.
Korys is the investment company of the Colruyt family. Today, it has more than EUR 4.5 billion of assets under management. Besides holding a significant participation in the Colruyt Group, a leading retail company in Belgium and France, it actively manages participations in privately held companies and in private equity funds. Korys has also set up proprietary funds to manage its portfolio of listed investments. Across its activities, Korys’ investment decisions are taken with a long-term perspective and on basis of strict economic (Profit), social (People) and ecological (Planet) criteria. Korys aims to create sustainable value in three major ecosystems: Life Sciences, Energy Transition and Conscious Consumer. To do this, Korys can count on a motivated team of 30 professionals based in Belgium and Luxembourg.
CDC is the UK’s development finance institution with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in Africa and South Asia. The company has investments in over 1,200 businesses in emerging economies and a total portfolio value of GBP 5.8bn. CDC is funded by the UK government and all proceeds from its investments are reinvested to improve the lives of millions of people in Africa and South Asia.
Proparco, the private sector financing arm of Agence Française de Développement (AFD), has been working to support development in Southern countries for 40 years. It plays a key role in AFD Group and the French cooperation mechanism: financing and support for projects led by companies and financial institutions in developing and emerging countries – from SMEs to regional banking groups, including microfinance institutions.
About SDG Frontier Fund
The SDG Frontier Fund is a close-ended, self-managed private equity fund of Funds, focusing on SME’s across sectors in frontier markets of Africa and Asia to promote job creation and sustainable economic growth. In its first closing the SDG Frontier Fund has partnered with nine institutional and private investors, including AG Insurance, Belfius Insurance, vdk bank and King Baudouin Foundation. The SDG Frontier Fund already approved investments in African Rivers Fund III, the Excelsior Capital Vietnam Private Equity Fund, and the Ascent Rift Valley Fund II.
About King Baudouin Foundation
The King Baudouin Foundation’s mission is to contribute to a better society in Belgium, in Europe and in the world. The Foundation is an actor for change and innovation in Belgium and Europe, serving the public interest and increasing social cohesion. It seeks to maximise its impact by improving skills in organisations and for individuals. It also stimulates effective philanthropy by individuals and corporations.
BIO has just published a call for tender for the next 3 Development Effectiveness Evaluations (period 2022- 2024), including a detailed Terms of Reference for the next evaluation that will focus on “BIO’s contribution to SDG10 – Reduced inequality and inclusive businesses”.
Belgian impact investor Incofin IM raises 45 million euros in a first investment round for its new impact fund focused on rural development in India.
During a launch ceremony at Résidence de Belgique in Abidjan, last Thursday, October 14, the Belgian Investment Company for Developing Countries (BIO) celebrated the opening of its first African office in Abidjan.