Project detail - Insitor Impact Asia Fund II Pte. Ltd.

Who is our customer

Insitor Impact Asia Fund II (“IIAF II” or “the Fund”) is a sector-agnostic Private Equity fund targeting investments in high-growth and scalable businesses active in Cambodia, India, and Pakistan. It is the second close-ended fund managed by Singapore-based Insitor Partners (“Insitor” or “the Manager”). The Fund will exclusively invest in companies providing solutions to low-income consumers/households along the main investment themes of better health, sustainable living, and economic growth.

What is our funding objective?

The Fund has a first close in December 2021. MASSIF, a Dutch government fund managed by FMO, intends to commit USD 10mln to the Fund, helping it reach a final size closer to its target and ensuring the viability of the investment strategy and sustainability of the manager. The Fund’s investment strategy is well aligned with MASSIF’s objective of supporting early-stage companies in frontier markets, and to support businesses that improve the livelihood and access to basic services for low-income households/consumers.

Why do we fund this investment?

Insitor has been active in South/South-East Asia since 2009 with a consistent investment strategy focused on low-income households. The team has on-the-ground presence in its three target countries, while being supported by a strong senior team in Singapore and an experienced Investment Committee. Impact objectives are core to the Fund’s investment strategy and the Manager’s culture. Insitor further has a demonstrated track-record of deploying scarce equity capital in markets where the penetration of PE activities is low (especially in Cambodia, Pakistan), and supporting its investees to scale through hands-on involvement. Given the Fund’s focus on low-income consumers, the investment is granted a 100% Reducing Inequalities label.

What is the Environmental and Social categorization rationale?

IAF II is categorised as A related to E&S risk, given the Fund has a pipeline and current investments in sectors such as housing development/construction, agribusiness and manufacturing, whilst investing in geographies with high contextual risk. All the before mentioned sectors are prone to risks relating to IFC Performance Standards 1 – 4, whilst the agri-business opportunities could have links to PS 6 - Biodiversity risks as well. Currently PS 5 – Land Acquisition and Involuntary Resettlement, PS 7 – Indigenous People and PS 8 – Cultural Heritage are not expected to be triggered. Contextual risk in the target countries of Pakistan, Cambodia and India is high in relation to human rights issues and poor environmental performance, hence proper risk identification, assessment and management is key in mitigating E&S risk. The Fund has a good Environmental and Social Management System (also covering Client Protection Principles), which has improved since the involvement of other Development Financial Institutions (DFIs) and commitment to DFI policies. With support from FMO and the implementation of Environment and Social Action Plan items related to supply chain management, biodiversity assessment and climate risk assessment amongst others, FMO believes the Fund can develop a management system and organisational capacity to support their investees in improving on the highlighted E&S risks.