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One of the biggest current challenges for the impact investing community is the aggregation and deployment of growth capital equity in the world’s poorest countries.
Few would argue with the proposition that for the world’s poorest countries to move out of poverty there must be a much higher volume of growth capital equity provided by private investors.
However, in view of the absence of local private equity, growth capital and venture funds in those countries, as well as the relatively small deal sizes, there is a challenge with respect to the way in which growth capital can be aggregated and deployed. It is unquestionably a ‘bottom of the pyramid’ problem. (For purposes of this article, I have considered the world’s 23 poorest countries, which I refer to as “the 23”).
If the Sustainable Development Goals are to be achieved and the poorest countries are to benefit from impact investment, it is crucial that a new model is developed for impact-driven growth capital equity investment in those countries.
That new model is a large private fund and a manager focused exclusively on growth capital equity investments across the 23 (which I refer to as the ’23 Fund’ or the ‘Fund’).