22nd October 2019, Seattle: Capria, the largest network of emerging market fund managers, recently announced it would be investing another USD $15M in emerging markets (EMs – Asia, Africa & Latin America). As a global investor with a uniquely collaborative network of partners, Capria’s efforts will focus on supporting local fund managers to strengthen their business, accelerate growth, and build world-class investing operations. Capria will invest its next group of funds across 3-5 additional EM managers that it will recruit for its collaborating global network that’s already 19 managers strong.
A Path to Attracting USD $2.6T to Meet SDG Opportunities
In the report from IFC in February 2019, to achieve the broadly-adopted SDGs, emerging markets and low-income countries need an additional investment of up to USD $2.6T. Additionally, EMPEA’s Limited Partners (LP) Survey (2019) states that more than 48% of 104 LPs across 37 countries indicated that they aim to increase their private equity allocations for EMs. This increased interest in the deployment of capital into EMs can be attributed to the rise in competition for assets in developed markets, attractive exit multiples, and lack of correlation with developed market assets.
Capria and other EM investors are working to unlock more institutional LP interest in emerging markets by demonstrating that:
- Investing to the needs of domestic consumption in EMs is resilient downturns in global markets
- Strong local institutions are emerging that can deliver sustained long-term profits, but they need support and global connectivity
- Access to performance information & financial data about local investments can surface exciting direct investment opportunities
Build a Resilient Investing Strategy
Impact investment strategies are inherently focused on sustainability meeting the needs of growing domestic consumption – including education, health, financial services, housing, etc. By selecting impact fund managers who invest in countries with more disciplined macroeconomic policies, relatively high levels of domestic savings, and lower dependence on external debt, it’s possible to build a global asset portfolio that will grow irrespectively of forecasted global economic headwinds.
Strong Local Institutions Emerging, But Need Global Support
In an increasingly connected world, fund managers in emerging markets need to operate at global standards that global fund investors (also known as limited partners or LPs) expect and trust. With chaotic market conditions and opportunities around every corner, many fund managers focus on getting basic operations and investment processes in place without building strong institutional capacity. However, with guidance and exposure to global best practices, emerging market fund managers are upgrading their practices and attracting global investors who are excited about locally-managed private investment opportunities.
Access to Key Performance Information & Data Illuminates Opportunities
Capital commitments from global LPs can be significantly increased if they have access to trustworthy key performance indicators and financial data on local investment opportunities. Transparency builds confidence, attracting more investment funds. Access to a strong network of trusted fund managers is vital to gathering the necessary information to support prudent local and global decision-making.
Building a Resilient, Collaborating Network
“As a global recession looms, we can expect consumption rates in developed markets to go down. At the same time, evidence suggests that most EMs show high resilience to US-initiated economic downturns. Capria works closely with EM funds to build resilient strategies to deliver superior returns for their global investors while creating sustained social and/or environmental impact. Our network model is now more relevant than ever to support local fund managers and link them with global LPs,” said Will Poole, Co-Founder & Managing Partner, Capria.
To capitalize on the abundant opportunities in the fastest growing and stable emerging economies, Capria is launching its 8th investment cycle and is now open for applications. So far, out of 800 applications, only 19 have been selected to join the Capria Network. Capria’s objective is to help emerging market fund managers build differentiated strategies, to adopt international standards, and to collaborate with one another to deliver superior returns.
“As a Capria Network member since 2016, Pomona has benefitted from our partnership with Capria in three important ways: 1) providing third-party validation in meetings with local family offices new to impact investing, 2) opening doors to institutional investors with global footprints, and 3) providing access to a global network of like-minded managers that share tools, knowledge, and connections that allow us to work faster and smarter”
– Daniel Granada, Partner at Pomona Impact, the leading impact firm in Central America investing from its second fund across the region.
Investing $3-5M in Each of Three to Five New Funds
To expand the EM investment and network building footprint, Capria has partnered with the Australian Government to expand early-stage investing in Southeast Asia. Recently, Capria opened its office in Singapore to welcome fund managers into the network from Asia. In Africa, Capria recently opened an office in Nairobi. Globally, Capria is looking to invest USD $3-5M each in 3 or more fund managers to capitalize on the budding entrepreneurial ecosystems in emerging markets.
Capria Ventures is a global investment firm leading, partnering with and funding the largest network of emerging market fund managers collaborating to deliver superior returns and scaled impact. Capria brings venture capital innovation and global best practices to local venture capital, private equity and innovative debt funds, managed by local investment experts. Capria’s network of investing partners collectively manage more than USD $300 million in assets deployed in early stage and early growth companies in Latin America, Africa, and Asia. Capria invests in partners via its USD $100M network fund, taking anchor GP and LP positions. Capria has offices in Seattle, Paris, Bangalore, Nairobi and Singapore. More about Capria Ventures >