Luxembourg Microfinance and Development Fund Sets Three-Year Growth Target of €60m for Social Impact Investments

On Thursday 27 June 2019, Investing for Development SICAV and its sub-funds, the Luxembourg Microfinance and Development Fund (LMDF) and the Forestry and Climate Change Fund (FCCF), held their annual general meeting of shareholders.

Since its inception in October 2009, the LMDF has established its track record as an impact finance fund accessible for Luxembourg investors. The Fund has seen significant growth from a net asset of €5 million to €40 million today and reaching 230,000 micro-entrepreneurs over the years. Indeed, private foundations, private banking, family offices and individuals have driven the growth of the Fund in the past years. Last financial year, LMDF grew by 22% in net assets through inflows from Luxembourg-based investors.

After nearly ten years of activity, and after exceeding the initial target size of €25 million, the Luxembourg Ministry of Finance has set the scene for the next stage in the LMDF’s growth by strengthening the risk mitigation available through public shares, by converting €4 million public shares, for the benefit of Luxembourg private investors and not-for-profit entities. 

The expanded risk capital allows a further €20 million of Class C (share class dedicated to retail investors) investments in the LMDF. As part of this growth phase, the LMDF is targeting €60 million in social impact investments in microfinance in three years.

In this context, Luxembourg Minister of Finance Pierre Gramegna has announced support for the next growth phase by enhancing the risk mitigation mechanism for Luxembourg private investors: “I am pleased to announce this new support to LMDF which has come as a consequence of its successful track-record in the last years. LMDF is a good example of a blended finance model which has allowed for substantial mobilization of private investment from Luxembourg investors for sustainable development".