FMO, LeapFrog Investments and PartnerRe, today announce that they have jointly invested Rp 562 billion (USD 45m) in leading home-grown Indonesian financial services company, Reliance Capital Management.
Reliance is a diversified financial services company that includes Indonesia’s fourth largest group health insurer, a listed top-5 retail securities arm, fast growing life insurer, operations in general insurance, and multifinance and asset management companies. The company has 750,000 individual end-customers, and a wide range of local and global institutional clients. It recently announced an investment in BKE Bank, a general bank with a focus on improving access to financial services. LeapFrog Investments is the world’s largest private equity investor in emerging markets financial services; this announcement follows a recent investment in SMK, a fast growing Thai insurance company. PartnerRe is a leading global reinsurer, based in Bermuda. The transaction has been structured to provide investors with a significant minority stake in the business.
Reliance President Director and Founder Anton Budidjaja, said, “This investment is a vote of confidence in Reliance’s strategy, and also in the direction and potential of the Indonesian financial services industry. We believe that LeapFrog, FMO and PartnerRe will bring exceptional insight and skills to building our business. We are excited to be working with them to extend the industry’s reach to Indonesians who have not yet had the benefit of essential financial tools.”
LeapFrog Partner and SE Asian head, Michael Fernandes, commented, “We are exceptionally positive about the quality of the team at Reliance, and its ability to address the enormous opportunities in the Indonesian market. This investment, our first in Indonesia, will allow us to participate in one of the world’s most exciting economies, and in a country which is becoming increasingly attractive for investors. As it grows, so consumers will have greater need for financial services: Reliance is poised to meet that need.”
FMO’s CIO Linda Broekhuizen said: “This facility will assist Reliance in expanding its role in the financing of Indonesia’s rapidly growing emerging middle-class, contributing to job creation in Indonesia.”
Chai Phrompechrut, Head of Private Equity at PartnerRe, said, “Anton and his team have built an exceptional platform and we are delighted to partner with LeapFrog and FMO to further solidify Reliance’s position as a leading diversified financial services conglomerate in Indonesia.“ Indonesia’s emerging middle class is expected to grow to 140m in the next 10 years. Insurance penetration is low, at around 2.1% of GDP (compared to greater than 4% in neighboring Singapore, Malaysia, and Thailand). The life insurance sector in Indonesia is projected to grow at over 20% pa over the next 5 years, while general insurance is projected to grow at 15% pa over the same period. Health insurance is projected to grow at 12% pa through the next 5 years.
Indonesia has one of the fastest expanding and healthiest banking sectors in Southeast Asia. However, financial access is low compared to other Asia-Pacific countries, with just 36% of adults having an account with a financial institution in 2014, versus 78% and 81% in Thailand and Malaysia, respectively.
Said Budidjaja, “Reliance is well positioned to serve the emerging Indonesian consumer across their financial services needs, as the demand for essential financial tools and products continues to expand rapidly.”
About Reliance Capital Management
Reliance Capital Management is an integrated financial services group with a dominant position in the Indonesian domestic markets. Maintaining operations in securities, insurance, multi-finance and asset management, Reliance serves customers through a fully developed branch network and a decade-long proven business model. With an aspiration to be a regional player, Reliance has been strongly committed to the ongoing integration of financial services operations. Through an extensive retail branch network Reliance serves some 750,000 clients/customers, supported by 37 office locations in 20 major cities throughout Indonesia. It recently announced an investment in BKE Bank, a general bank with a focus on improving access to financial services. For more information please visit http://www.relianceindonesia.com.
About LeapFrog Investments
LeapFrog Investments, the world’s largest private equity investor in emerging markets financial services, is seizing the growth opportunity presented by two billion emerging consumers in Africa and Asia. LeapFrog’s portfolio companies currently provide insurance, savings and pensions products to over 44 million people in countries such as India, Indonesia, Sri Lanka, Ghana, Nigeria, Kenya and South Africa. 30 million of these are low-income emerging consumers, most of whom had limited previous access to financial tools. A pioneer in profit-with-purpose investment, the LeapFrog team draws on decades of operational experience to identify and help build extraordinary companies that deliver top-tier financial and social returns. LeapFrog’s distinctive investment strategy has attracted many of the world’s leading institutional investors, and the company now manages over half-a-billion dollars of investor assets. SE Asia is a major focus for the LeapFrog, and this investment follows its recent investment in Thailand’s SMK. For more information please visit www.leapfroginvest.com or follow LeapFrog on Twitter @LeapFrogInvest.
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. For 45 years, FMO has been investing in the private sector in developing countries. We believe in a world in 2050 where nine billion people can live well and within the boundaries of the planet. In pursuit of this vision, our mission is to empower entrepreneurs to build a better world. We specialize in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion, FMO is one of the largest bilateral private sector development banks. http://www.fmo.nl.
About PartnerRe
PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company, through its wholly owned subsidiaries, also offers capital markets products that include weather and credit protection to financial, industrial and service companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multi-line and other lines in its Non-life operations, mortality, longevity and accident and health in its Life and Health operations, and alternative risk products. For the year ended December 31, 2014, total revenues were $6.5 billion. At December 31, 2014, total assets were $22.3 billion, total capital was $7.9 billion and total shareholders’ equity attributable to PartnerRe was $7.0 billion.
