With commitments in excess of $157 million in hand, Apis Partners, a new private equity fund targeting financial services opportunities in Africa and Asia has held a first close for its debut fund. The fund was launched in July 2014 and is targeting a cap of between $250-$300 million.
Apis Growth Fund I is being backed by a number of institutional investors and financial institutions from Europe, North America and Africa, including Intesa Sanpaolo and old Mutual as well as a number of DFIs such as the UK’s CDC, the European Investment Bank, FMO, the dutch development bank and Sweden’s Swedfund. The fund is betting on the rapidly expanding financial services sector in Africa and South Asia driven by changing demographic and macroeconomic fundamentals and the structural gaps in supply and demand in the regions.
In reporting the story, the Financial Times highlights that as more developed buyout markets are faced with capital gluts and higher asset prices, investors are increasingly looking to invest in specialist funds, dedicated to specific niches and untapped markets. That, combined with the Apis Growth Fund I’s unique investment thesis, impact mandate and investment pipeline, all helped the private equity manager quickly reach its first close.
“Of the 2.5 billion unbanked adults globally (over half the world’s adults), 2.2 billion reside in growth markets,” said Apis co-founder and managing partner Udoyan Goyal. “We are firmly convinced that Financial Services will deliver in the next decade the same level of return on investment as the telecom boom of Africa and south Asia of the last two decades.”
With the arrival of new, cheaper technologies such as mobile banking, these unbanked individuals can more effectively access consumer financial services products. Typically, these newly-created digital financial services technologies are adopted more quickly in emerging markets, and in turn could become models for innovation in the more developed economies.
“We strongly believe that the next wave of business-model innovation in financial services will come from growth markets.” commented co-founder Matteo Stefanel. “As incomes in these markets continue to rise, so will the demand for formal financial services, representing a unique opportunity for entrepreneurs creating innovative and cost-effective solutions”