[Microinsurancefocus] Leapfrog reaches halfway to $100m target - This week in Private Equity Online

[Jim Roth]

Leapfrog reaches halfway to $100m target
The pioneering microinsurance fund has garnered $50m from the likes of the
European Investment Bank and Dutch development finance company FMO. The fund
will invest in developing countries in Africa and Asia. posted - 17 Feb 2009
11:00 GMT Toby Mitchenall

Leapfrog Investments, the first private equity firm to focus solely on
investments in microinsurance, has reached the halfway mark on its debut
fund. Investors committed to the fund so far include the European Investment
Bank (EIB) and Dutch development finance company The Nederlandse
Financierings-Maatschappij voor Ontwikkelingslanden (FMO).

A $50 million first close for the fund is scheduled for mid-March.

    *Developing nations: underserved by financial products* The fund has
been well received by investors, UK-based Leapfrog partner Jim Roth said in
an interview. "People have realised this is a big opportunity and many
investors want to be the first in," he said, adding that the relatively
uncorrelated returns from microfinance investments were also proving
attractive to institutions.

The fund will make between eight and 10 investments of $5 million to $10
million each in Asia and Africa. The microinsurance industry gives
low-income people and businesses access to insurance products, typically in
developing countries. The market for microinsurance is estimated at around 1
billion people, only 3 percent of whom currently have access to insurance,
according to a report from specialist consultancy The Microinsurance Centre.

Leapfrog's is the first vehicle to focus on this area. Plutarchos
Sakellaris, vice president at the EIB, said his organisation's commitment of
$20 million was "the Bank's first ever involvement in a microinsurance fund
and we are confident that similar successful operations will follow".

"The fund will play an important role in developing the highly underserved
micro-insurance segment," said Gert-Jan Monster, private equity investment
officer for the FMO.

Logical targets for microinsurance investment are South Africa, India,
Pakistan, Nigeria, Uganda, Kenya, Indonesia and the Philippines.

LeapFrog has three different investment strategies it plans to pursue. The
first is to invest in existing microinsurance companies. The second is to
form a joint venture with existing companies with large distribution
networks and help them add microinsurance offerings to their operations. The
third approach is to work with larger insurers in the markets to add
products for low-income people.

Leapfrog's fundraising received a fillip in September when former US
President Bill Clinton formally launched the fund in front of 1200 global
leaders and 1000 press at the Clinton Global Initiative annual meeting.
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-- 
Visit our website: www.leapfroginvest.com

Dr. Jim Roth
Tel:    +44 131 240 1208
Mob:  +44 7914 397 314
e-mail: jimroth at leapfroginvest.com

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