MICROCAPITAL STORY: Dutch Firm PGGM Commits $316m to Microfinance Investments

Dutch firm PGGM, the asset manager for the Netherlands’ healthcare pension fund, Pensioenfonds Zorg & Welzijn (PZW), has announced a EUR 200 million (USD 316 million) commitment to specialist fund managers affiliated with microfinance over the next few years.

PGGM’s first investment of EUR 27 million (USD 42.7 million) has been made with the Luxembourg-based Dexia Micro-credit Fund, for projects in Africa, Asia, Latin America, and Eastern Europe.

MicroCapital has recently reported on Dexia loans to microfinance institutions (MFIs) in February and March.

PGGM focuses on socially and environmentally sustainable investments.  It aims for strategically mixed portfolios that offer high and stable returns while remaining highly risk-conscious.  PGGM is partnered with Alpinvest, which manages the private equity interests of its client; Albright Capital Management, manager of emerging-market investments in which PGGM takes part; Eumedion, a corporate governance association of institutional investors; and DSR, a research firm that analyzes sustainability information on Dutch listed companies.  It came into being as a spin-off from PZW on January 1, and it currently manages EUR 88 billion (USD 139.1 billion) in assets on PZW’s behalf. No further financial information on PGGM appears to be available on the Internet.

The Dexia Micro-Credit Fund is a commercial investment fund, begun in 1998, that refinances “microfinance institutions specialized in financial services to small companies in emerging markets.” As of March 2008, the fund had total assets of USD 298.5 million, of which USD 284.9 million was allocated to 163 active microfinance investments. It currently finances approximately 60 MFIs in 25 emerging economies worldwide. The fund is managed by BlueOrchard Finance, a Swiss microfinance investment advisor.

By Stephen Son

Additional Resources:

Responsible Investor: “PGGM makes one of world’s biggest institutional investments in microfinance”

Oanda: FX Converter

MicroCapital.org article, February 19, 2008: “Dexia Micro-Credit Fund of Luxembourg Lends $3m to Microfinance Institution FINSOL, $2m to Microfinance Institution FUNDESER, $1.5m to Microfinance Institution Bai Tushum, and $100k to Microfinance Institution Sodruzhestvo”

MicroCapital.org article, March 25, 2008: “Dexia Micro-Credit Fund of Luxembourg Lends $1m to Microfinance Institution CCA, $1m to Microfinance Institution Credo, $5m to BancoSol Bank, $5m to Microfinance Institution FINDESA, $5m to MFBA Bank, $3m to ProCredit Holding, $5m to ProCredit Bank, $1.5m to Microfinance Institution LOKmicro, and $500k to Microfinance Institution AMK”

Thomson Investment Management News: “PGGM taps Dexia as it makes foray into microfinance market”

MIX Market: Profile for Dexia Micro-credit Fund

BlueOrchard: What We Do

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