Will use proceeds to further push into Africa and Southeast Asia; Targets AUM of $7 billion by 2025-26

Aavishkaar Group, one of the world’s largest impact investors, has raised $37 million (about Rs 262 crore) in fresh financing from Dutch development finance institution FMO, as the Mumbai-based social capital investor looks to push further into Africa and Southeast Asia.

“We are in the third phase of our consolidation, where we have invited FMO to join as a shareholder in the group, right at the top. This will be a minority stake – about 10%,” Vineet Rai, chief executive of Aavishkaar Group, told ET.

Aavishkaar, which currently manages assets of about $1 billion, received $32 million from Nuveen, the investment management arm of diversified financial services giant Teachers Insurance and Annuity Association, in December last year. ET was the first to report this development.

In 2017, Triodos Investment Management, the investment arm of European lender Triodos Bank, and Shell Foundation, chipped in $25 million into the company.

According to Rai, a substantial portion of proceeds from the new round will be used to start building the groundwork to expand its operations in Africa and Southeast Asia, with an added focus on bringing its debt vehicles to the two regions.

“FMO has a very deep network in both regions, and we expect them to play a very clear strategic role in the impact investing space,” Rai said. “We are targeting the next 7-8 years to grow our assets under management from $1 billion today, to $7 billion, or Rs 50,000 crore.”

Founded in 2001, Aavishkaar Group comprises five entities — microfinance institution Arohan; Aavishkaar Capital, which runs a slew of venture capital funds; Intellecap, which undertakes consulting, research, investment banking and social entrepreneurship; fin-tech-focused lender Tribe3, and SME-focused debt finance provider IntelleGrow.

Under its equity investment arm, Aavishkaar Capital, the Group has launched six funds, across India, Africa and Southeast Asia, with an estimated $450 million in assets under management. It is currently in the process of raising its first Africa-focused fund, and its second Southeast Asia fund, both of which have a target corpus of at least $150 million.

“With this investment into the group, we hope to help the Aavishkaar Group reduce the vulnerability of India’s, Southeast Asia’s and Africa’s low-income population… We will work with Aavishkaar to help them build their own institution so that they can focus on what they do well: building companies, backing entrepreneurs and unlocking innovative ideas,” FMO said in a statement.

India continues to be Aavishkaar’s core market, with Asia’s third-largest economy having about 65% of its total AUM. Aavishkaar has undertaken about 68 investments, and recorded 30 exits till date.