LeapFrog Co-Founder Sets Up New Business to Take Stakes in Impact Investors

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Nov 2019
Global, November, 04 2019 - Zamo Capital is Europe’s first specialist investor in impact investment firms. It will focus on providing scale to impact funds by acquiring equity stakes in the fund managers, providing capital and its expertise, as well as intensive support and an established network of investors.

Jim Roth, the co-founder of LeapFrog Investments, an impact-focused private equity firm targeting investments in Africa and Asia, has launched a new venture in the sector.

Zamo Capital is Europe’s first specialist investor in impact investment firms. It will focus on providing scale to impact funds by acquiring equity stakes in the fund managers, providing capital and its expertise, as well as intensive support and an established network of investors to help raise new capital to accelerate the growth of these firms.

For every £1m invested, Zamo aims to help its impact funds raise £50m, the company said in a statement.

“This rapidly growing asset class has been well-established by Dyal Capital, Blackstone, and Goldman Sachs’ Petershill and we see enormous opportunity in applying it to the $500bn impact investment sector,” said Roth.

Private equity firms have raised billions of dollars to take stakes in other buyout groups. One of the biggest deals in this area was Blackstone's acquisition in August of a 10% to 15% stake in BC Partners for €500m. In addition to the larger funds in this area, several businesses have set up targeting smaller, emerging businesses. US-based investment firm Wafra created a joint venture last year called Capital Constellation. Others in the sector include Meteor5 Capital and Investcorp's Strategic Capital Partners business.

Zamo is backed by Big Society Capital, a UK-based social investment firm. Since inception in 2012, Big Society Capital, alongside other investors, has made over £1.7bn in capital available to organisations with a social mission.

Jeremy Rogers, chief investment officer at Big Society Capital, commented: "We are looking to support the growth of high potential managers we see in our portfolio. We are excited by the depth of skills and experience Zamo will bring to this challenge.

”Zamo will invest in a range of impact funds including commercial funds with a distinct social impact but are primarily created to generate profit, such as clean energy and biotech funds; profit with purpose funds and social investment funds that lend to charities, community and housing associations, and also those that arrange social impact bonds and related investments.

The push into the impact investment market comes at a time when the interest in the sector continues to grow. Global Impact Investing Network estimates organisations of various types managed a total of $502bn in impact investing assets at the end of 2018.



 

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