Dealflow | August 28, 2019

LGT acquires Aspada from Soros to expand Lightstone impact investing platform

David Bank
ImpactAlpha Editor

David Bank

ImpactAlpha, Aug. 28 – LGT, the $215 billion private banking and asset management firm of the royal family of Liechtenstein, took majority control of Aspada, an early-stage venture investor that has made 19 investments in India totalling more than $69 million.

LGT acquired the stake from the Soros Economic Development Fund, the impact investing arm of financier George Soros’ Open Society Foundations, which had been Aspada’s only outside investor since the firm was launched in 2013. Terms of the deal were not disclosed. 

The acquisition will expand LGT’s new Lightstone impact investing arm, which has assets of more than $400 million, primarily from the royal family. LGT’s Prince Max von und zu Liechtenstein told ImpactAlpha that Lightstone (a rough translation of Liechtenstein) will seek to raise external capital next year to build a multi-billion dollar global impact investing platform. 

We at LGT are quite convinced that impact is a dimension that is increasingly gaining importance for all businesses and we want to make sure we become a leading player in that field,” Prince Max said in an interview.

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Aspada’s Kartik Srivatsa said the new firm, LGT Lightstone Aspada, will be able to make larger and later-stage investments in agricultural supply chains, healthcare, education and financial services. Aspada has often been the first institutional investor in its portfolio companies, which have attracted hundreds of millions in follow-on investments from investors including Unitus Impact Fund, Lok Capital, Omidyar Network, Sequoia Capital, LeapFrog Investments and Amazon. Aspada has realized three exits, from its investments in Reverie, Aasaan Jobs and Thinklink. 

Aspada has its roots in SONG, a $20 million partnership between the SEDF, the Soros fund, and Omidyar Network and that was launched in 2008. SEDF moved forward on its own to launch Aspada as a holding company, rather than a traditional 10-year fund, to be able to provide portfolio companies with more patient capital and business support. 

“To go to the next level, to be able to expand the amount and type of capital they were able to commit to these businesses, Aspada needed to find other partners to work with,” SEDF’s Sean Hinton told ImpactAlpha. In addition to the direct impact of Aspada’s investments, Hinton said the philanthropy’s goal was to crowd in other investors. “Once that role is played and others are willing to come in, we should hand the baton on.”

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Lightstone is a rebranding and relaunch of LGT’s impact platform, which suffered a setback in February with the departure of much of its senior impact investing team, which had been led by Sev Vettivetpillai, formerly of the Abraaj Group. Several weeks later, Vettivetpillai was arrested in London in connection to alleged accounting fraud at Abraaj, once a high-flying emerging markets and impact investor. 

Prince Max said the shakeup didn’t derail LGT’s impact investing initiative. “We have invested more capital this year than probably any of the prior years,” he said. 

In addition to Aspada, LGT Lightstone has impact investing teams in São Paulo and Nairobi, as well as London. The London office is focused on technology investments worldwide. “We think technology is going to play a key role in addressing global challenges,” Prince Max said. He said the structure of the offering to external investors has not been determined and added that the sub-Saharan Africa portfolio may not initially be included. 

“From a fundraising perspective, Africa scares a lot of people,” he said. 

Aspada was the largest commitment in SEDF’s porfolio. Hinton said the Soros fund in recent years has committed more then $60 million annually in new impact investments and this year made the most investments, in both deals and dollars, in its 25-year history. 

“We are only more committed to finding other Aspada’s, building other Aspadas in other parts of the world,” Hinton said.