Prudential Financial to Invest $350 Million in African Insurers
January 22 2016 - 9:10AM
Dow Jones News
Prudential Financial Inc. has committed $350 million to invest
in life insurers in Africa, the continent with the fastest-growing
population.
The funds will be managed by LeapFrog Investments, a
private-equity firm with offices in London and Sydney that was
founded in 2008 to invest in financial-services companies in
emerging markets.
Prudential Financial previously contributed to a $400 million
fund that LeapFrog raised from multiple investors to buy stakes in
companies from Africa to Asia. The new partnership will target
majority stakes in large life-insurance companies in Ghana, Kenya,
Nigeria and other countries. Prudential Financial will have the
option to buy the companies from the fund, LeapFrog cofounder Jim
Roth said in an interview.
"The potential targets are the large, established life insurers
in Africa," Mr. Roth said. The partnership will target acquisitions
worth as much as $200 million, he said.
Global insurers are seeking ways to expand in Sub-Saharan Africa
as the rapidly growing population, rising incomes and new
technology make the market more attractive, according to a recent
report by consulting firm EY. Annual insurance premium growth is
expected to reach 10% in Nigeria, 9% in Ghana and 6% in Kenya
through 2018, according to EY.
American International Group Inc., MetLife Inc., Swiss Re AG and
France's Axa SA have also invested in LeapFrog's previous
funds.
LeapFrog is planning to raise a new fund of between $800 million
and $1 billion from investors. The U.S.'s Overseas Private
Investment Corp. has agreed to invest as much as $200 million in
the fund.
LeapFrog says it aims to create a positive social impact as well
as a financial return from its investments by providing financial
services to people who often don't have access to them.
More than 36 million people reached by companies in which it has
invested in are so-called emerging consumers who earn less than $10
a day. Most of these people are accessing insurance, savings,
pensions or credit for the first time, according to LeapFrog.
Write to Simon Clark at simon.clark@wsj.com
(END) Dow Jones Newswires
January 22, 2016 08:55 ET (13:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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