The fund seeks to alleviate poverty and boost entrepreneurship in the region and it is London-based M&G’s second investment into an impact-driven public private partnership (PPP) model.
M&G Investments has committed €107m into one of the world’s largest impact vehicles to support job creation and poverty reduction in Southeastern Europe.
The commitment sees the London-based asset manager invest into the €1.3bn European Fund for Southeast Europe (EFSE), a blended finance vehicle with backing from the European Commission and the European Investment Bank. The fund provides financial access for underserved microfinance lenders and financial institutions in developing countries in Southeast and East Europe.
M&G said the blended model has provided micro, small, and medium enterprise funding to more than 50,000 female-owned enterprises.
This is M&G’s second investment into an impact-driven public private partnership (PPP) model following a $90m investment into the Microfinance Enhancement Facility, which provides funding to more than 120 financial institutions in 44 countries globally.
Social impact
Eoin O’Shaughnessy, co-head of structured credit research at M&G Investments, said the investment isn’t just a financial decision, but a commitment to creating positive change on the ground.
“Our investment isn’t just about seeking financial returns; it’s about helping to make a tangible difference in people’s lives,” said O’Shaughnessy.
“By leveraging our expertise in PPP models, we’re able to amplify the flow of private capital to institutions that share our vision of fostering inclusive and sustainable economic growth,” O’Shaughnessy added.
The investment is anchored by M&G’s Catalyst, a £5bn private assets strategy which invests in companies innovating to solve environmental and social challenges. The Catalyst team manages the strategy on behalf of the £126bn Prudential With-Profits Fund.
M&G added that by leveraging public capital from global entities like the European Commission and the European Investment Bank, the fund can attract further private investment towards achieving its social and economic development aims.
Furthermore, by investing into the region’s financial infrastructure, it provides local businesses with the opportunity to thrive through the provision of financial products, technical assistance, and access to finance for underserved communities.
“This is the single largest private sector investment in the fund to date,” said Andrea Hagmann, EFSE board chairperson.
“We are thus able to multiply the capital provided by public institutions through private capital and significantly increase the overall impact,” said Hagmann.
