Azure partners was formed in 2011 by Jack Lowe and Vincent Oswald, both formerly of micro-finance-focused fund manager BlueOrchard Investment, whose fund offerings include private equity funds. During the last seven years, they have co-invested with 74 micro-finance funds, 36 fund managers, 10 micro-finance networks and 10 development banks, providing them with extensive knowledge of microfinance institutions and investors. The firm’s new vehicle, Azure Global Microfinance Fund, includes a 25% allocation to private equity funds, roughly reflecting the proportion that Azure Partners believes private equity investments constitute of the total size of the microfinance industry.
The fund will invest in a total of 15 to 20 funds from the 120 or so Azure Partners believes are active in the micro-finance space, with a preference for region-focused funds as opposed to broader global funds. The private equity allocation will be split equally between new primary commitments and purchases of interests on the secondary market. Azure Partners will seek diversification geographically between emerging markets, and between the larger funds. The firm believes that demand for larger funds is increasingly reaching saturation point, whereas smaller, successful funds are more likely to be targeting smaller micro-finance institutions.