UOB Venture Management (UOBVM) announced on June 10 the expansion of its impact investing efforts with the launch of its second impact fund in the second half of this year. Focused on Asia, the new private equity fund is the second series of UOBVM’s Asia Impact Investment Fund (AIIF II).
The AIIF II is a double bottom-line fund, aiming to achieve both impact and financial returns, and will be made available to global institutional and accredited investors. It will continue the strategy of the AIIF’s first series to invest in the region’s education, healthcare and agriculture sectors.
The fund will also seek investments in the areas of financial inclusion, affordable housing, clean energy, water and sanitation. The impact generated by portfolio companies will be measured and tracked regularly.
In assessing potential deals for the AIIF II, UOBVM will evaluate the positive impact the companies would bring to low-income communities – also known as the “bottom of the pyramid”. It will also consider the companies’ ability to scale their business in a sustainable manner. The fund will take minority stakes in the investee companies, making equity investments of about US$1 million to US$15 million in each of them.
UOBVM managing director and CEO Seah Kian Wee describes impact investing at UOBVM as one way of helping bring about and sustain responsible growth. He explains: “Through AIIF II, we want to support more entrepreneurs and companies that are able and are committed to working with low-income communities in overcoming challenges. By providing the financing they need to develop and to build their team, business model, capabilities and solutions to scale, we can help them to do good and to do it well.”
UOBVM launched the first series of the AIIF (AIIF I) in 2015 to invest in growth companies in Southeast Asia and China that addressed key social challenges. The companies aimed to improve lives in low-income communities by including them as consumers, suppliers or distributors in commercially sustainable ways.
The AIIF I has since invested in nine such companies across China, Indonesia, Myanmar, the Philippines and Vietnam – supporting them in creating a meaningful impact in the communities they serve. The efforts of the fund’s investee companies have led to more than 10 million low-income individuals benefiting from higher income or better access to affordable products and services, financing and quality.
One of the investee companies in AIIF I is Ruangguru, an education technology company in Indonesia that offers K12 students from across Indonesia affordably-priced digital education resources. Its learning platform also enables children in remote provinces to access quality content such as videos, infographics and other materials through mobile devices. More than 10 million students have benefited from Ruangguru’s platform, reporting higher levels of engagement, better understanding of topics and improved academic results.
Another investee company also from Indonesia is called Halodoc, a healthcare technology company, which allows patients from across the country, including underdeveloped regions, to connect to more than 20,000 licensed doctors via its mobile app and website. It aims to simplify healthcare by improving accessibility and enhancing the patient experience.
In China, AIIF I has invested in Zhejiang Lanmei Agriculture Company, a large blueberry seedlings company that aims to become a major raw material supplier of blueberries in the country. It introduced its improved breed to blueberry seedlings to villages in Guizhou, Henan, Sichuan and Zhejiang provinces. It also provides holistic services across the supply chain, from imparting cultivation techniques to farmers to providing post-harvest sales support. More than 15,000 farmers are earning higher income from sales of the higher-value blueberry crop.