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ABP increases microfinance lead

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NETHERLANDS - ABP, the €216bn civil service pension fund has increased its lead in the asset class segment with an additional $25m (€17m) investment in the microfinance private equity fund Catalyst Microfinance Investors (CMI).

At the end of last year, ABP had invested $32m, already making it the largest investor in microcredits in the Netherlands.

"Our financial commitment will give some of the world's most disadvantaged people the opportunity to improve their livelihoods, while the investment has the potential to simultaneously provide us with a combination of strong growth and attractive returns in high-growth economies," explained Paul Spijkers, chief investment officer alternative investments of ABP.

"Since they are relatively non-correlated with most other asset classes, these investments are particularly fit for a pension fund as a risk diversifier," Spijkers continued.

According to ABP spokesman Thijs Steger, ABP's investment in microcredits have returned 6% on average so far. ABP started investing in microcredits with an amount of $5m in 2005.

CMI's fund closed with a total commitment of $125m from institutional and private investors, making it the largest collective equity capital commitment to micro finance ever, according to CMI.

Catalyst Microfinance Investors made clear it intends to deploy most of the funds for the rapid establishment and growth of ASA International in many of the largest microfinance markets in Asia and Africa.

ASA International is one of CMI's major investment vehicles, managed in partnership with ASA of Bangladesh, one of the world's largest and most successful microfinance institutions. From over 3,000 branches, it serves over  six million 'micro entrepreneurs' all over the country.

CMI and ASA International have already started operations in Cambodia, Ghana, India, Nigeria, Pakistan, the Philippines and Sri Lanka, and they expect to become operational in China and Indonesia later this year, CMI said.

CMI is a private equity investment fund, managed in partnership by ASA of Bangladesh and Sequoia - an independent, international corporate finance advisory and investment firm, focused on emerging, fast-growing microfinance institutions throughout Asia and Africa.

According to CMI, other major investors include the Gray Ghost microfinance fund and its sister fund, the Global Microfinance equity fund.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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