In response to strong investor interest in private equity in microfinance following the launch of the Azure Global Microfinance Fund of Funds, Azure Partners announces is launching its second fund of funds targeting the microfinance industry.
Azure Microfinance Private Equity Fund of Funds will aim to capture high growth in emerging markets, investing in microfinance private equity funds.
The Fund will adopt a four steps investment strategy aimed at giving investors access to a fast growing, de-correlated industry, with low volatility. All of this in a vehicle which spreads risk in terms of geographic and diversity of underlying investments. Funds under management will be capped at $100m for a term of 10 years.
The investment strategy will focus on:
Worldwide allocation – Diversified investment across regions with an active geographical allocation
Local Fund Managers – Ability to identify investment opportunities in the cluster of fund managers, while partnering with experienced EU or US based fund managers
1st or 2nd fund – Capturing high growth of first movers and providing more favourable conditions to investors
Small funds – Targeting smaller Microfinance Institutions with higher growth potential and participating actively in the funds’ Advisory Committees
The fund will invest in 10-12 private equity funds, targeting mostly smaller funds, investing in specific regions or countries. The Fund is targeting a net IRR of 15-20%.
Jack Lowe, Co-Founder and Chairman of Azure Partners says: “The microfinance sector is currently growing at around 20 – 30 % per annum. There is a track record of positive returns each year since inception for all debt funds and this has been maintained since the year 2000. This impressive track record makes this the ideal time to launch a private equity fund of funds. Following the launch of our first fund, we are extremely well placed to leverage our position in the industry in order to provide attractive investment opportunities for private equity investors. We are confident that the fund will generate both solid financial and social returns to investors.’’
Azure Partners, the Swiss based investment house founded by Jack Lowe and Vincent Oswald, previously of Blue Orchard Finance, launched the first global microfinance fund of funds – the Azure Global Microfinance Fund in October 2011. This fund has so far made several investments, in addition to signing a worldwide distribution agreement with a global European bank.
