BlueOrchard launches Impact Credit Fund

Zurich, 21 November 2023

  • The BlueOrchard Impact Credit Fund (“BOIC” or “the Fund”) complements BlueOrchard´s existing offering in financial inclusion.
  • Building on an extensive network and expertise in the fastest-growing regions and the significant capital needs in emerging markets, the strategy offers institutional investors the opportunity to invest in a multi-credit portfolio that seeks an attractive risk-adjusted return and offers diversification benefits.
  • As an SFDR Article 9 fund, BOIC aims at contributing to social inclusion and reduced inequalities by capturing “3D” megatrends in emerging markets: demographics, digitalisation, and decarbonisation.

BlueOrchard, the global impact investment manager and member of the Schroders Group, today announces the launch of its Impact Credit Fund. This new fund aims to further increase financial inclusion in underserved regions worldwide, strengthening BlueOrchard's commitment to making a positive social and environmental impact.

The BlueOrchard Impact Credit Fund (BOIC) focuses on investing in a diverse portfolio of smaller financial institutions that play a crucial role in social and environmental development, encompassing a range of critical sectors such as SME lending, digital payment solutions, renewable energy, and energy efficiency as well as climate adaptation solutions, amongst others.

Building on BlueOrchard’s outstanding investment platform in financial inclusion, it will also engage in direct lending to medium-sized businesses that are significant players in their respective market segments, hereby helping to build and enhance the re-financing market for SMEs. To achieve this, BOIC leverages BlueOrchard’s extensive network and well-established relationships with local banks, development financial institutions, specialised investment funds or other professional private debt investors.

As an SFDR Article 9 fund, BOIC aligns with BlueOrchard's mission to contribute to social inclusion and reduced inequalities. By capturing the "3D" megatrends in emerging markets, the BlueOrchard Impact Credit Fund addresses critical global challenges and contributes to sustainable development. The fund's focus on demographics, digitalisation, and decarbonisation aligns with the growing demand for financial services, the increasing adoption of digital banking, and the substantial opportunities in green finance.

Philipp Mueller, CEO at BlueOrchard, commented:
​“We see three megatrends shaping fast-growing emerging markets today: demographics, digitalisation and decarbonisation. These developments are accompanied by significant capital needs and investment opportunities, which our regional teams are seeing first-hand. We are excited to have launched an investment strategy that captures these opportunities, fills a gap in terms of both funding and impact, and complements our investment platform.”
Michael Wehrle, Head of Investment Solutions at BlueOrchard, added:
​“Our team of experienced portfolio managers, impact managers, and investment officers follow a rigorous and structured investment process, drawing on our 20+ year track record in financial inclusion to ensure effective investment strategies. We are proud of our team's expertise and look forward to continuing to provide our investors with impact investment solutions tailored to their risk/return appetite.”

Through its strategic investments, BOIC aims to drive positive change and create a more inclusive and sustainable future. It is open to qualifying investors (subject to local regulation) through a range of share classes denominated in different currencies.

-Ends-

Notes to editor

Capturing “3D” megatrends in emerging markets

We see three major megatrends in emerging markets: the pivotal role of micro, small, and mid-sized enterprises (MSMEs) in driving growth, the increasing digitalisation of financial services, and the growing opportunities in green financing. Our Fund is specifically designed to capture and capitalise on these megatrends.

Demographics: Access to financial services drives business growth

Access to financial services is vital for the growth of businesses. Currently, there is a significant financing gap for MSMEs, estimated to be around USD 5 trillion according to the World Bank. This data reveals that more than 130 million registered MSMEs, approximately 40% of the total, have unmet financing needs. Additionally, around 1.7 billion people worldwide do not have bank accounts, depriving them of payment services, credit, and savings. Our Fund addresses this gap by investing in financial institutions that provide loans to MSMEs and by directly investing in companies.

Digitalisation: Growing demand for digital financial services

The demand for digital financial services is on the rise due to population and economic growth. Emerging markets have witnessed a significant adoption of digital banking and an increasing utilisation of fintech apps and e-wallets. By 2025, the use of digital finance could potentially increase the GDP of emerging markets by 6%.[1]

Decarbonisation: Green finance as a rapidly growing market

Emerging economies have a significant role to play in the global fight against climate change, particularly in the field of green finance. The potential for green finance in emerging markets is substantial. For example, green buildings alone present a USD 24.7 trillion investment opportunity by 2030 across emerging market cities.[2] By focusing on green finance, our Fund contributes to sustainable development and addresses the challenges posed by climate change.

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About BlueOrchard Finance Ltd

BlueOrchard is a leading global impact investment manager and member of the Schroders Group. As a pioneering impact investor, the firm is dedicated to generating lasting positive impact for communities and the environment, while aiming at providing attractive returns to investors. BlueOrchard was founded in 2001, by initiative of the UN, as the first commercial manager of microfinance debt investments worldwide. Today, the firm offers impact investment solutions across asset classes, connecting millions of entrepreneurs in emerging and frontier markets with investors with the aim to make impact investment solutions accessible to all and to advance the conscious use of capital. Being a professional investment manager and expert in innovative blended finance mandates, BlueOrchard has a sophisticated international investor base and is a trusted partner of leading global development finance institutions. To date, BlueOrchard has invested over USD 10 billion across more than 100 countries. Over 280 million underserved people and MSMEs in emerging and frontier markets received access to financial and related services with the support of BlueOrchard as of December 2022. For additional information, please visit: www.blueorchard.com.

Important information

Marketing material for Professional Clients and Qualified Investors only.

The information contained herein is confidential and may not be further distributed or reproduced by the recipient.

The information in this document was produced by BlueOrchard Finance Ltd (“BOF”), a member of the Schroders Group.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

BOF is the investment manager of the BlueOrchard Impact Credit Fund (the “Fund”).

The Fund qualifies as a Reserved Alternative Investment Fund ("RAIF") structured as a Société d’Investissement à Capital Variable (“SICAV”) and incorporated as an Société Anonyme ("S.A.") under Luxembourg law.

The Fund has been passported under the Alternative Investment Managers Directive (“AIFMD”) and can therefore only be marketed in the EEA to Professional Clients in the following countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway and Sweden.

The fund has been notified to the FCA under NPPR for marketing to Professional Clients in the UK.

Subscriptions may only be made on the basis of the Fund’s legal offering documents which can be obtained from BlueOrchard Asset Management (Luxembourg) SA on request.

The representative in Switzerland (“Swiss Representative”) is 1741 Fund Solutions AG, Burggraben 16, 9000 St. Gallen, and Bank Tellco AG, Bahnhofstrasse 4, 6430 Schwyz is the paying agent in Switzerland. The prospectus for Switzerland, the key information document, the articles of incorporation and the annual and semi-annual reports may be obtained free of charge from the Swiss Representative.

An investment in the Fund entails risks, which are fully described in the Fund’s legal documents.

The fund has the objective of sustainable investment within the meaning of Article 9 of Regulation (EU) 2019/2088 on Sustainability-related Disclosures in the Financial Services Sector (the “SFDR”). For information on sustainability-related aspects of this fund please go to https://www.blueorchard.com/sustainability-disclosure-documents/.

Any reference to regions/countries/sectors/stocks/securities is for illustrative purposes.

BOF has expressed its own views and opinions in this document and these may change without notice.

Information herein is believed to be reliable but BOF does not warrant its completeness or accuracy.

The data contained in this document has been sourced by BOF and should be independently verified. Third party data is owned or licenced by the data provider and may not be reproduced, extracted, or used for any other purpose without the data provider’s consent. Neither BOF nor the data provider will have any liability in connection with the third party data.

The terms of the third party’s specific disclaimers, if any, are set forth in the Important Information section at www.blueorchard.com/legal-documents/.

This document may contain “forward-looking” information, such as forecasts or projections. Please note that any such information is not a guarantee of any future performance and there is no assurance that any forecast or projection will be realised.

Distributed in the EEA by Schroder Investment Management (Europe) S.A., 5, rue Höhenhof, L-1736 Senningerberg, Luxembourg. Registration No B 37.799.

Issued by BlueOrchard Asset Management (Luxembourg) S.A., 1 rue Goethe, L-1637 Luxembourg. Registration No B 170.191.

Distributed in the UK by Schroder Investment Management Ltd, 1 London Wall Place, London EC2Y 5AU. Registration No 1893220 England. Authorised and regulated by the Financial Conduct Authority.

Copyright © 2023, BlueOrchard Finance Ltd. All rights reserved.

[1] McKinsey Global Institute, Digital Finance for All, 2016, MGI-Digital-Finance-For-All-Executive-summary-September-2016.ashx (mckinsey.com).

[2] IFC, Green Buildings. A Finance and Policy Blueprint for Emerging Markets, 2019, 59988-ifc-greenbuildings-report-final-1-30-20.pdf

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