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Investment Strategy

The Fund seeks:

 
  • Innovative business models that serve BoP markets that are scalable and capable of reaching the “last mile” of the value chain.

  • Skilled entrepreneurs that are ambitious, experienced, of high integrity, committed to a vision and with a strong capability for execution.

  • Businesses capable of fundamental systemic change and social impact that can:
 
  • Generate substantial economic value to support expansion on a massive scale and attract new industry entrants to the BoP market.
  • Deliver a good or service that has an appreciable positive impact on the capacity of BoP clients to accumulate assets, increase their income and improve their quality of life.

Because the base of the socio-economic pyramid has largely been ignored by conventional business, successful models at the BoP often involve the establishment of a new and unique infrastructure, providing a first-mover advantage that is difficult to replicate. Accordingly, successful BoP models are capable of yielding and retaining substantial economic value.

Market Opportunity

The low-income sectors of the population represent an attractive commercial market for three fundamental reasons. It is:

 
  • A large cash market
  • Severely underserved
  • Insulated from the traditional industry leaders, who often have focused on the Top of the Pyramid

Social Impact

An estimated 360 million of the approximately 550 million people that live in Latin America earn less than $3,000 per year. Around 40% (over 200 million people) live at or below the line of poverty. In order to respond fundamentally to a problem of this scale, and not to just ameliorate its symptoms, we subscribe to the notion that interventions must fulfill four conditions:

 
  • Scale: the capability to reach large numbers
  • Permanence: so that it can be assured for various generations of the poor, including outliving its current champions
  • Efficacy: a model that gets better and better through time
  • Efficiency: a model that attains lower and lower costs through time/li>


We believe that the only way to deliver all four simultaneously and consistently is through business. This is not achieved through one firm, but through the creation of an industry, which is the natural outgrowth of an economic activity which generates levels of profitability equal or higher than those with the same risk profile.

Once such levels of profitability are reached, access to the capital market provides the resources to sustain continuous growth.

As profits attract competition, pressures are generated to drop prices, increase the variety of products and improve the quality of service. Ultimately, it is competition that assures that the returns of the business accrue not only to investors but also to the customer base.

INVESTMENT PARAMETERS

    With US$102 million in capital, IGNIA seeks to make equity investments between $1 million to $10 million.

    Our investments are focused on such areas as agriculture, housing, healthcare, education, basic services, technology and telecom markets – sectors that have a disproportionate impact on low-income populations.