Social Investment Gets Regulator's Go-ahead: SEBI Registers Incube Connect Fund Under AIF

While social investment is not an alien concept in the Indian investment arena, it definitely did not receive its due fanfare until now.

However SEBI provided the floor to this segment as it approved the registration of Incube Connect Fund, one among the pioneering social venture fund.

The fund will be accorded registration under SEBI Alternative Investment Fund (AIF) regulation 2012.

So what does the Incube Fund aim to do?

Incube Connect Fund is sponsored by Incube Ventures Pvt. Ltd. It is a R200 Cr, nine year long sector agnostic fund that will invest in socially relevant models of business that will generate returns for the investors alongside.

Primary focus will be on the sectors of social relevance like healthcare delivery products and services, vocational education and skill development, clean energy and sustainable rural business innovations, the firm states.

The firm has been operating an idea incubation center – In-CUBE with enabling eco-system and is currently involved in incubating about six inexperienced socially relevant business ideas.

Social Investment On The Rise

Social investment has gained a lot of traction in the past couple of years with various types of funds emerging and reputed names from the PE/VC industry turning into social investors.

Late last year Impact Circle invested in Sudiksha Knowledge Solutions, an operator of Bottom of Pyramid (BoP) schools with focus on quality education at an affordable rate. Newly born angel investment network - Impact Circle comprises of wealthy individual that have joined hands to support social ventures.

The network has backing from institutional investors such as Ennovent, Swiss firm Rianta Capital, and the Michael and Susan Dell Foundation and it aims to provide seed capital in the range of $25,000 to $1 Mn (R14 lakh to R5.5 Cr) to very young social ventures.

Patni brothers, Amit and Arihant Patni, acquired 43% in social investment bank, Grameen Capital India. Operating as a advisor, Grameen Capital is a JV between Grameen Foundation, Citi and IFMR Trust and is focused on driving the social development with mobilization of R700 Cr of capital till date.

Big names like Motilal Oswal have also noticed the space and it was planning to India focused Impact Investment Fund with a corpus of R250-300 Cr for investment in such socially relevant ventures.

India, with a huge population and a massive potential for such types of investment avenues (considering the rural outreach for funds), is gradually coming on to the radars of international investors as well.

Grassroots Business Fund was spun off from Grassroots Business Initiative of the World Bank’s IFC in 2008. It aims to fund socially relevant projects in India.

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