London, 8 May 2024 – M&G today announces a €107 million investment into one of the world’s largest impact vehicles - the €1.3 billion European Fund for Southeast Europe (the Fund) - which provides access to finance for underserved microfinance lenders and financial institutions in developing countries in the South East and East Europe.
Established to support financial ecosystems in markets with the highest need, advised by Finance in Motion, the Fund promotes entrepreneurship, job creation and poverty reduction. By investing into the region’s financial infrastructure, advised in Finance in Motion, it provides local businesses with the opportunity to thrive through the provision of financial products, technical assistance and access to finance for underserved communities.
Leveraging public capital from global entities like the European Commission and the European Investment Bank, the Fund is able to attract further significant private investment towards achieving its social and economic development aims. This blended finance model has provided micro, small and medium enterprise funding to more than 50,000 female-owned enterprises, while circa 2.1 million jobs have been indirectly supported by financing received through partner lending institutions since 2005.2
The €107 million investment is anchored by M&G’s purpose-led private assets strategy, Catalyst, the £129 billion Prudential With-Profits Fund1 and external funds managed by M&G’s Private Credit team. This is M&G’s second investment into an impact-driven public private partnership (PPP) model following a $90 million investment into The Microfinance Enhancement Facility, which provides funding to more than 120 financial institutions in 44 countries globally.3
“Partnering with EFSE enables us to channel impactful capital towards empowering households and micro-SMEs in the region” says Eoin O’Shaughnessy, Co-Head of Structured Credit Research at M&G Investments. “Our investment isn’t just about seeking financial returns; it’s about helping to make a tangible difference in people’s lives. By leveraging our expertise in PPP models, we’re able to amplify the flow of private capital to institutions that share our vision of fostering inclusive and sustainable economic growth. This investment isn’t just a financial decision; it’s a commitment to creating positive change on the ground.”
“This is the single largest private sector investment in the fund to date," says Andrea Hagmann, EFSE Board Chairperson. "We are thus able to multiply the capital provided by public institutions through private capital and significantly increase the overall impact. M&G is a major institutional investor participating in impact investing. It brings an important new partnership with the private sector to the fund and complements existing partnerships with renowned investors."