UNITUS EQUITY FUND
Overview
Launched in the spring of 2006, the Unitus Equity Fund, L.P. (UEF) is the first 100-percent privately funded equity fund active in the microfinance industry.
The UEF was established to encourage the development of a commercial equity market needed to serve the rapidly growing microfinance industry. With new capital markets in place, microfinance institutions will have increased access to the funds they need to offer more and better services to their clients.
The fund seeks to earn its investors a return commensurate with risk, while simultaneously providing social returns by investing in organizations working to alleviate poverty. Though UEF invests in Unitus partners, UEF and Unitus are separate legal entities with separate management teams and oversight.
History
The nonprofit organization, Unitus, Inc., was established in 2001 with co-founder and Board Chairman, Mike Murray, and CEO Geoff Davis’s innovative Unitus Acceleration Model, designed to tackle the growth barriers of the underperforming microfinance industry resulting from capacity and capital constraints. After several years of operations under its belt, Unitus's growing momentum and ambitious goals for expanding its portfolio of partners created a need for additional sources of funding to support its MFIs. The Unitus Acceleration Model was working, but capacity-building grants and small amounts of debt alone would not be able to meet the intense capital needs of high-growth microfinance institutions.
Chris Brookfield, Investment Director, Unitus Equity Fund
Convinced that the industry must evolve toward a market-based, sustainable future, Unitus set out to lead in the development of a commercial equity market, launching the UEF in the spring of 2006 with the objective of raising $20 million.
While the idea of private investment in the microfinance industry was relatively unproven at the time, the UEF team believed that the market conditions created a compelling opportunity for a new generation of risk-tolerant, socially-minded investors. In March 2007, the Unitus Equity Fund exceeded its initial goal by announcing its close of $23.6 million in committed capital, making it the largest global equity fund in the microfinance industry to be fully funded with private capital. Limited partners in the fund include Omidyar Network, the clients of Abacus Wealth Partners, and Kensington Investments, L.P.
