Dealflow | January 15, 2019

‘Value investor’ Magallanes raises €12 million to invest in global microfinance

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, January 14 – Madrid-based Magallanes has raised €12 million ($13.8 million) towards its first social impact fund. The fund, called Magallanes Impacto, invests in microfinance institutions worldwide.

At first glance, Magallanes Impacto appears to be a divergence from Magallanes’ niche: the Spanish fund manager invests in publicly listed companies in Europe, with a focus on Spain and Portugal in particular. But the value investor, which looks for opportunities that it believes are under-priced by the market, wrote in a letter to investors that it believes microfinance is one of these under-priced sectors.

“Micro-credits have proven historically to be an asset class that is at a great distance from other financial markets,” the letter states. The opportunity for Magallanes’ investors in a sector serving the world’s more than 1.7 billion unbanked adults is that it “links [investment] diversification to a sustainable social impact that is measurable over time.”

Magallanes launched the fund in October with a goal of raising €20 million. The fund is being advised by Spanish impact advisory firm Gawa Capital and has already made investments in Chile, Peru and India. It is open to accredited investors committing a minimum of €100,000.