ImpactAlpha, October 12 – Move over Mexico, Peru is now the top destination in Latin America for impact investment capital. Impact investors invested a total of $1.4 billion in Latin America in 2016 and 2017. The uptick from the previous two-year period was driven by a doubling (from a small base) of capital from homegrown investors.
Peru attracted $218 million, more than any other Latin American nation, in 152 investments. Mexico, the longtime leader, fell to third place with $169 million, behind Ecuador ($185 million).
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Investments made by locally-based investors more than doubled, from $95 million in 2014 and 2015 to $193 million in 2016 and 2017; A little less than half the investors surveyed are based in Latin America.
The new data is from the 2018 edition of the “Impact Investing Landscape in Latin America,” a report from the Aspen Network of Development Entrepreneurs and the association for Private Capital Investment in Latin America, or LAVCA. The two organizations released a first edition in 2016.
- Bigger funds. Investors targeting Latin America expect to raise up to $2 billion in 2018 and 2019. A Latin America Fund of Funds aiming to catalyze blended financing in the region was launched at last week’s GSG Summit in New Delhi. Blue Like an Orange Sustainable Capital notched $100 million for a first close for its Latin America debt fund. OPIC and IDV Invests launched the $200 million Fund Mujer to boost women’s entrepreneurship.TPG’s Rise Fund doubled down on education in Argentina with investments in Digital House and Grupo VI-DA. Adobe Capital launched a second fund targeting small and mid-sized companies in Mexico.
- Microfinance remains king. Microfinance institutions still draw more than half of all impact investment capital in Latin America. Separating that out, the top three countries for capital deployment are in Mexico, Brazil and Ecuador. The new report showed that 55 investors made 860 investments in microfinance, agriculture, information technology, energy and other impact sectors.
