UBS has set up and closed its first impact investing fund to invest in small and medium-sized enterprises (SMEs) in emerging and frontier markets.
The Impact Investing SME Focus Fund is managed by Obviam, an independent investment advisor specialized in long-term investments in emerging and frontier markets.
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The fund will take equity stakes in privately held SMEs through the underlying funds. Investments will be made in sectors and businesses that drive social or environmental change. These include healthcare, education, access to finance, basic infrastructure and agricultural/sustainable forestry.
The fund has already made its first investment in an education fund in India. This investment will help the emerging middle class gain access to high-quality but low-cost education and other ancillary educational services like IT.
In addition to the initial investment in the fund, investors will also have the opportunity to co-invest alongside UBS and make additional direct impact investments outside of the fund.
The launch of the Impact Investing SME Focus Fund is part of UBS’s wider commitment to leverage its position as the world’s largest wealth manager and mobilize private capital for positive impact.
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By GlobalDataThe importance of the strategy is that SMEs constitute the backbone of most economies. In developing countries they employ more than 75% of the workforce, yet very few have access or sufficient access to finance.
Claude Barras, CEO of Obviam in Bern, said: "Obviam is very excited about this partnership with UBS. We have been an active investor in the impact investing space for over 14 years for the Swiss Confederation. With this product, we open up these investment opportunities to private investors."
Jürg Zeltner, CEO UBS Wealth Management, said: "The Impact Investing SME Focus Fund offers clients a unique investment opportunity in emerging and frontier markets that will generate significant social and environmental impact while yielding a financial return for investors."
