BlueOrchard Finance, a Switzerland-based impact investment manager, has raised $50 million in the second closing of its latest private equity climate insurance fund, reaching halfway through its fundraising goal.
Launched in 2022, InsuResilience Investment Fund Private Equity II is the second instalment of the climate insurance fund series which targets insurance companies that cater to populations and small businesses with exposure to climate risks, according to a company statement. German state-owned KfW is among its limited partners.
The Luxembourg-domiciled vehicle seeks to mobilises private sector capital to support climate change adaptation and build resilience in emerging markets, including Asia, Africa, and Latin America, with a target of 12-20% net internal rate of return. It has so far deployed capital in Singapore-based insurtech startup Igloo and Brazilian agricultural insurance company Newe.
The news comes almost three years after BlueOrchard announced the $80-million final close of its predecessor InsuResilience Investment Fund I with backings from KfW, the Soros Economic Development Fund, and the European Investment Bank, among others, in July 2020.
BlueOrchard’s first climate insurance fund has invested in nine portfolio companies which offer insurance cover to over 48 million beneficiaries in more than 45 countries as of June 2023.
“We see a strong pipeline of opportunities for our strategy as the climate insurance ecosystem in our target markets enters the growth phase. Scalability and affordability of the offering, as well as technological expertise and operational excellence, are critical to succeed in this space. With our unique network and expertise, we are the partner of choice for many of the firms that excel in these areas,” said Martín Diaz Plata, head of private equity investments at BlueOrchard.
Founded in 2001 by an initiative of the United Nations, BlueOrchard is the first commercial manager of microfinance debt investments worldwide. With blended finance mandates, the firm has made $10-billion impact investments across asset classes in emerging and frontier markets in over 105 countries.
BlueOrchard, which is majority-owned by Schroders, led CHARGE+ZONE’s Series A1 funding round, which raised $54 million (Rs 450 crore) in March. Vietnamese lender Nam A Bank also received $20 million in debt financing from BlueOrchard a month prior.