Impact investment firm Aavishkaar-Intellecap Group is raising ₹225 crore (approx $31 million) from US-based Teachers Insurance and Annuity Association (TIAA) as it looks to scale up its various businesses, said two people aware of the development.
Founded in 2002 by financier Vineet Rai, Aavishkaar-Intellecap Group offers a range of financial products to entrepreneurs working on solving problems at the bottom of the pyramid, including equity funds, a venture debt vehicle, microfinance lending, investment banking services, consulting, research and access to global networks.
It operates its equity funds business through Aavishkaar Venture Management Services; investment banking, consulting and research through Intellecap; working capital and business loans to small and medium enterprises through Intellecash; venture debt through Intellecap and microfinance lending through Arohan.
“The capital raising will help the group scale up its asset management and lending business as well as fund new strategic initiatives,” said one of the people cited above, requesting anonymity.
“TIAA is investing ₹225 crore in the group through its asset manager Nuveen. The capital will be invested in the group’s holding company,” the person said, adding TIAA has been associated with Aavishkaar-Intellecap “for sometime as an investor in the group’s impact funds”. The transaction is in the final stages and is likely to be announced in the coming weeks, the person said. The group had raised $25 million in January 2017 from Triodos Investment Management, the investment arm of European lender Triodos Bank, and Shell Foundation, an independent charity of the Shell Group. While Triodos had invested $15 million, Shell contributed $10 million.
In March, Mint reported that the Aavishkaar-Intellecap Group was looking to raise around $50-75 million from global investors to fund its growth plans.
“We have no comments at this point in time,” a spokesperson for TIAA said in an emailed response to queries. Aavishkaar-Intellecap, too, declined to comment. TIAA offers financial services in the fields of academic, research, medical, cultural and governments.
Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure long-term financial goals of institutional and individual investors. Nuveen has $967 billion in assets under management as of March and operates in 16 countries. Aavishkaar-Intellecap is India’s largest homegrown impact investment asset manager.
On 5 November, Mint reported Aavishkaar plans to raise $300 million for its South Asia-focused fund early next year to invest across financial services, agriculture, energy and health. The fund will be used for investments in Vietnam, Indonesia, Myanmar and Laos, among others. Aavishkaar is currently raising capital for two funds: the $200 million India-specific Aavishkaar Bharat fund, and a $150 million Africa fund, which will mark its entry into Africa.
The Aavishkaar Bharat Fund will be the largest India-focused impact fund by a domestic fund manager. It achieved its first close at $95 million in November 2017. The fund is backed by institutional investors such as the UK’s development finance institution CDC, Small Industries Development Bank of India (Sidbi), National Bank for Agriculture and Rural Development (Nabard) and family offices of Hero Enterprise’s Sunil Munjal, among others.
The group expects its Africa fund to hit the first close at $60-80 million by April 2019.
Source: Mint