Founding Partner and Chief Investment Officer, FIR Capital
Dr. Jim Roth co-founded LeapFrog Investments, a profit-with-purpose fund manager which invests in high-growth financial services companies in Africa and Asia. Jim leads LeapFrog’s work in South Asia as well as the firm’s Europe office.
Jim is a leading expert in the global mass-market insurance sector, and a pioneer of commercial microinsurance. Formerly Vice President of The Microinsurance Centre, Jim was also ILO Chief Technical Advisor on microinsurance in India, and has acted as a consultant to multinational insurance companies such as AIG and Allianz and banks such KFW and ADB. He sourced and led one of LeapFrog’s largest investments, into Shriram CCL, a distributor of low-cost financial services including insurance, savings, and investment products for the emerging Indian consumer.
Recognizing the growing importance of impact investing, EMPEA established an Impact Investing Council in 2013 to play a leading role in professionalizing and scaling the industry, focusing specifically on market-based solutions to major global social and environmental challenges. EMPEA believes that private equity investors have much to contribute to impact investing in emerging markets. The private equity discipline lends commercial expertise and financial rigor, and private equity practitioners have years of experience operating in underserved geographies and inherently impactful sectors (e.g. financial services, healthcare, education, agribusiness, and housing), with customer segments (e.g. low income people and those excluded from traditional sources of finance).
Since its inception, EMPEA has contributed to the acceptance of emerging markets private equity as a credible and attractive investment approach. Despite the vast potential for impact investing to unlock growth and reduce poverty in emerging markets there is still much skepticism about its power to do so. The domain is fragmented, and the data available to investors on the institutional quality of investment managers as well as their performance, are lacking. The EMPEA Impact Investing Council is well positioned to help private equity impact investing overcome some of these obstacles and realize its potential. The Council seeks to bring together leading impact investing practitioners and thought leaders to share best practices, support rigorous research, assist in the development of innovative business models and performance databases. In this chapter, several Council members describe a range of private equity approaches to impact investing, explain how they add value and measure impact, and highlight the challenges still to overcome.