GLOBAL - ABP and TIAA-CREF are among the investors to commit US$125m to Catalyst Microfinance Investors (CMI), in a deal claimed to be the largest ever collective equity capital commitment to microfinance.
ASA International is one of CMI's major investments vehicles, managed in partnership with ASA of Bangladesh, a microfinance institution, which serves over six million micro-entrepreneurs from more than 3,000 branches spread all over Bangladesh.
CMI and ASA International have already commenced operations in Cambodia, Ghana, India, Nigeria, Pakistan, the Philippines, and Sri Lanka, and expect to become operational in China and Indonesia later this year.
Paul Spijkers, chief investment officer (CIO), alternative investments, at Stichting Pensioenfonds ABP, said: "Our financial commitment to CMI and ASA International will give some of the world's economically most disadvantaged people the opportunity to improve their livelihoods, while, simultaneously, the investment has the potential to provide us with a combination of strong growth and attractive returns in high growth economies.
"These investments are particularly fit for a pension fund as a risk diversifier. They are relatively non-correlated with most other asset classes."
By year-end 2007 ABP had microfinance investments amounting to US$32m, which makes it one of the biggest Dutch investors in this form of finance.
Scott Budde, managing director, social and community investing, TIAA-CREF, a US financial services organisation and provider of retirement services in the academic, research, medical and cultural fields , added: "CMI and ASA International provide TIAA-CREF with an important opportunity for a second investment in our Global Microfinance Investment Program.
"We believe ASA is an efficient vehicle for expanding microfinance around the world with a consistent focus on both the betterment of low income borrowers and a competitive investment structure.
"We are also pleased by how this structure of this investment is enabling Bangladesh to strengthen and export some of the significant microfinance management expertise it has developed over the years."
The Next Generation Pensions Committee is on a mission to promote and encourage younger voices in the industry. Kim Kaveh looks at its key objectives
This week's top stories included an analysis finding the cost of equalising guaranteed minimum pensions in schemes could hit FTSE 100 profits by up to £15bn.
Employers whose dividend to deficit recovery contribution (DRCs) ratios fall outside the "normal range" should expect to see higher regulatory scrutiny, although no fixed ratio will be set.
Investment consultants and fiduciary managers should expect a final decision on the investigation into the market to be published by the end of the year, the competition watchdog says.