Lok Capital, an India focused impact investment fund has achieved the first close of Lok Fund III at $40.5 Mn. The third fund has a total target corpus of around $100 Mn and is expected to close in the next 12-18 months.
This round saw participation from CDC Group Plc (the Development Finance Institution of the UK), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.’s (FMO)and Société de Promotion et de Participation pour la Coopération Economique (Proparco). While TIAA Global Asset Management has come on board providing a new source of capital for Fund III.
Announcing the first close of fund III, Venky Natarajan, Managing Partner, Lok Capital said, “Aided with the government initiatives from the last few years along with very progressive regulatory environment, the climate is ripe in India for deepening financial inclusion through both traditional business models as well as through fin-tech models.”
The fund will be deployed in the next five years. It will be focussed on growth stage investments in financial services, healthcare, agriculture, and livelihood. The average portion per investment will range between $2 Mn to $10 Mn. However, Lok Capital will continue to collaborate with LPs for joint investment in larger deals.
Fund III will also focus on other emerging models in financial services such as SME finance, affordable housing finance and digital/tech-enabled financing. In healthcare, it will focus on delivery of affordable healthcare, devices, and diagnostics in underserved geographies. In addition to these, Fund III is expected to back more enterprises in the agriculture and dairy space as the agriculture sector has opened up significant opportunities for impact investments including dairy, supply chain management and integrated farm-to-fork models, etc.
Lok Capital is a venture capital firm dedicated to making long-term equity investments in enterprises that are creating commercially viable inclusive businesses.
Since its inception in 2002, Lok Capital has focused on focus are financial services, agriculture, healthcare, affordable housing, and income enhancement. It has fully returned the committed capital of $22 Mn from Fund I with a USD IRR of 15%. Fund II is presently tracking gross returns of 28% in USD terms, with portfolio companies Equitas and Ujjivan going public. Some of its exits include Satin Creditcare, Janalakshmi Microfinance and RuralShores.
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