Global Pensions, a magazine serving the global institutional pensions industry, recently reported that following significant investments in microfinance by Dutch pension funds ABP and PGGM, California State Teachers’ Retirement System (CalSTRS), a USD 133 billion pension fund located in the US, will consider investing in microfinance investment vehicles. ABP recently announced a USD 30 million investment in Grassroots Capital’s Global Microfinance Equity Fund, and in July 2009 PGGM announced a USD 60 million investment in the same fund. According to a research report on the CalSTRS’s website, the demand for microfinance loans is around USD 300 billion, with supply fulfilling approximately 13 percent of that demand.
The article notes that for the five years ended December 31, 2009, the Symbiotics Microfinance Index, an index of microfinance bonds maintained by Symbiotics, has provided returns similar to the Barclays Capital Aggregate Bond Index, an index maintained by Barclays Capital that is often used to represent investment grade bonds traded in the United States.
By: Christine Chang, Research Associate
About California State Teachers’ Retirement System (CalSTRS):
California State Teachers’ Retirement System (CalSTRS) is a pension fund whose primary responsibility is to provide retirement-related benefits and services to teachers in public schools and community colleges in the US state of California. CalSTRS has a membership of 833,000. As at February 28, 2010, the pension fund reported total assets of USD 133 billion.
About Grassroots Capital:
Grassroots Capital is an asset manager that invests in microfinance, with total assets under management of USD 200 million, spread across global and regional funds. Grassroots’ investment strategy is based on a network of regionally-based, operationally-focused investment managers. The firm’s aim is to deliver “double bottom line” returns to its investors through a combination of long-term capital appreciation and measurable social impact.
About Symbiotics:
Symbiotics SA Information, Consulting and Services is primarily a microfinance investment intermediary. Founded in 2005, Symbiotics provides investment intermediary services to the microfinance industry as well as business services to investors and practitioners of micro- and small enterprise development. The organization offers a variety of services, including market information, consulting and investment brokerage to microfinance institutions and microfinance investors.
Additional Resources:
Global Pensions: CalSTRS explores microfinance, April 6, 2010: http://www.globalpensions.com/global-pensions/news/1599783/calstrs-explores-microfinance
MicroCapital Universe: California State Teachers’ Retirement System (CalSTRS): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=California+State+Teachers%E2%80%99+Retirement+System+%28CalSTRS%29
MicroCapital Universe: Grassroots Capital: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grassroots+Capital
MicroCapital Universe: Symbiotics: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Symbiotics+SA+Information%2C+Consulting+and+Services
MICROCAPITAL BRIEF: Dutch Pension Fund ABP Invests $30m in Grassroots Capital’s Global Microfinance Equity Fund (GMEF), April 7, 2010: https://www.microcapital.org/microcapital-brief-dutch-pension-fund-abp-invests-30m-in-grassroots-capital%E2%80%99s-global-microfinance-equity-fund-gmef/
MicroCapital.org: NEWS WIRE: The Netherlands: Pension Fund PGGM Invests $60m in Grassroots Capital Global Microfinance Equity Fund, August 10, 2009: https://www.microcapital.org/news-wire-the-netherlands-pension-fund-pggm-invests-60m-in-grassroots-capital-global-microfinance-equity-fund/
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