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The Social Investments Program at Prudential (NYSE:PRU) has invested $10 million in LeapFrog Investments to help fund investments in companies that provide insurance, savings, pensions, investment products and other financial services to emerging consumers in Africa, South Asia and Southeast Asia.
LeapFrog, an emerging markets fund manager, has raised an initial $204 million for the LeapFrog Fund II from Prudential and several other of the world’s largest insurers, reinsurers, banks and asset managers. The fund will focus on eight markets in Africa and Asia where financial services growth is nearly 18 percent annually. LeapFrog’s priority markets are Indonesia, the Philippines, India, Sri Lanka, Kenya, South Africa, Nigeria and Ghana.
“LeapFrog’s deep sensitivity to social impact investment in businesses that focus on underserved consumers in an ethically responsible manner resonates with the strategy of Prudential’s Social Investment Program,” said Lata Reddy, vice president, Corporate Social Responsibility at Prudential and president of The Prudential Foundation. “Providing quality financial services to underserved communities is a compelling investment opportunity for both social and financial reasons.”
Dr. Andrew Kuper, LeapFrog Investments’ president and founder said “The emerging consumer segment is increasingly attractive. It comprises millions of people eager to join the middle class. Their spending power is forecast by McKinsey & Co. to rise from $2 trillion today to $5 trillion in the coming decade. Financial services are crucial springboards for households and businesses, but access is very limited. LeapFrog backs the best companies to serve this vast and untapped market.”
Prudential’s Social Investments program supports nonprofit and for-profit ventures that share the company’s dedication to creating livable and sustainable communities. Through socially responsible investments, the program funds projects that develop and preserve affordable housing, improve access to quality education, and connect neighborhoods and residents to economic growth opportunities.
“The emerging consumer represents a striking growth opportunity,” said Reddy. “Financial services penetration within this segment is low, the need for products is high, and competition is still limited. LeapFrog Investment’s differentiated strategy puts it at the forefront of emerging markets private equity. The team has demonstrated that investments in financial services for the emerging consumer can yield performance while transforming communities.”