Sweden’s AP2 is investing $30m (€26m) in the Women Entrepreneurs Opportunity Facility (WEOF), a public/private partnership aimed at increasing access to capital for women entrepreneurs in developing countries.
The facility was launched in 2014 by the Goldman Sachs 10,000 Women initiative and the International Finance Corporation (IFC), which provided more than $150m in anchor investments to create the facility.
The facility has raised “well over half” of the $600m that it is targeting, IPE understands.
In a statement, Eva Halvarsson, chief executive at the SEK300bn (€32bn) Swedish buffer fund, said women in developing countries were an under-utilised resource and faced obstacles that “we wish to help them overcome, while also making a sound financial investment”.
A spokeswoman at AP2 told IPE the WEOF investment was being managed externally for the buffer fund.
In its portfolio, it is considered an alternative investment, “but it is somewhat difficult to put a label on it since we have not done anything like it before”.
As to the expected return, she said she could only say that, as with any other investment it makes, AP2 expected “a good risk-adjusted return”, as “the financial outcome of this investment will ultimately be the result of negotiations taking place between the facility and the banks that want to fund themselves through it”.
Halvarsson, meanwhile, linked AP2’s investment in WEOF to the fund’s investments in emerging markets and its long-term approach, saying the investment in the facility contributes to further long-term economic growth in these countries.
“This benefits our overall portfolio in the long term, which in turn benefits our pension fund beneficiaries,” said Halvarsson.
“That we are simultaneously contributing to a better future for these women and their enterprises is something we can be proud of, and I hope others will join us in this type of investment initiative in future.”
Last year, the Overseas Private Investment Corporation, the US government’s development finance institution, said it would provide up to $100m to finance projects under the facility.
Goldman Sachs 10,000 Women is a campaign to foster economic growth by providing women entrepreneurs around the world with access to capital and a business and management education.
The facility it launched with the IFC has the goal of enabling 100,000 women entrepreneurs to access capital.
Dina Habib Powell, head of Goldman Sachs’s Impact Investing business and president of the Goldman Sachs Foundation, said: “Research has shown investing in women entrepreneurs can drive significant global growth and opportunity and improve societies.
“Increasingly, informed investors like AP2 are looking for innovative models that both make an impact and generate a return.
“This partnership with IFC, which has catalysed new investments from both the public and private sectors, highlights the increased interest in investing in this space to close the capital gap for women-owned SMEs.”
To date, the facility has made more than 20 commitments to banks in 14 countries, increasing lending to 25,000 women entrepreneurs in countries such as Brazil, China and the Democratic Republic of Congo.