Investing In Resilience – Launching The IIX Growth Fund

Southeast Asia (SEA) has shown tremendous progress toward the Millennium Development Goals and pulled hundreds of millions out of poverty over the last two decades. However, natural disasters, health epidemics, and financial shocks keep pushing millions back into poverty. In order for the region to sustain the progress achieved and build on it, countries need to ensure that its populations, particularly those at risk, build holistic resilience.

IGF1

At IIX, we have had the privilege of working with social entrepreneurs that have developed innovative solutions to build economic, social, and environmental resilience. For example, LiveOlive, a personal finance site for women in Indonesia, builds financial resilience among middle and low income women, helping them cope with financial shocks and business cycles through guided personal investments. Bali Recycling, a recycling company in Bali, builds environmental and social resilience by diverting waste from illegal landfills and rivers. Gerweiss, a company that builds e-trikes in the Philippines, builds environmental and social resilience for communities on the island of Boracay by providing clean and reliable public transport vehicles.

The most daunting challenge that innovative enterprises like LiveOlive, Bali Recycling, and GerWeiss face, is getting access to the right capital at different stages of their growth. IIX’s Impact Partners Platform works with these enterprises at early stages of development. However, these enterprises and hundreds more like them need more capital at different stages of their growth. Providing the right capital to these enterprises could catalyze resilience solutions throughout the region – keeping millions from regressing into poverty due to circumstances that are beyond their control.

According to IIX estimates, the total demand for capital in our target 4 countries and 4 sectors is US$4.0 billion – a majority of it by enterprises that help build financial, social, and environmental resilience. And this is likely to grow many folds over the next few years. Angel investors and HNWIs have been at the forefront of meeting this demand in SEA as most companies are at an early stage. However, SEA is now at an inflexion point where enterprises need larger sums of capital that investments funds and institutional investors can provide.

IIX is launching the IIX Growth Fund (IGF) in October 2015 to make equity investments in innovative enterprises in South and Southeast Asia. Sized at US$50 million, the fund will largely focus on four key areas: education, food and agriculture, energy, and water, sanitation, and healthcare (WASH). The focus geographies for the fund are Bangladesh, Cambodia, Indonesia and Philippines. The IGF aims to fill the market gap for investments in SEA, and fulfill IIX and Shujog’s mission of “Impacting 100 million lives by 2020 by linking capital markets with development issues.”
We hope that more private and institutional investors from around the world will join us in this mission to make SEA’s population resilient and prosperous.

 

Rashi Agrawal, Manager, IIX & Shujog
Susumu Handa, Emory University Goizueta Business School