Wealth & Finance International - Fund Awards 2015

www.wealthandfinance-intl.com 21 Best Emerging Asia Impact Investment Fund - Osiris Asia Impact Fund The Osiris Group is a boutique private equity firm scaling innovation in frontier markets. A top priority for the firm is allo- cating capital into investments leapfrogging long-term development, prosperity and growth. Pioneering impact investing in Asia, their investment framework integrates public policy, entrepreneurship and operational leadership, creating sov- ereign alpha while best capturing risk-adjusted growth returns. Their Co-Founder and Managing Director, Jason Bajaj, spoke to us about their firm’s philosophy on how money can truly make a difference through Impact Investing. In 1961, a pandemic wave of Cholera began in Sulawesi, Indonesia and violently spread across Asia, Europe and Africa. Extreme dehydration, induced by diarrhea and vomiting, triggered rapid death, killing tens of thousands of people in South Asia alone. Bengali doctors working feverishly in Dacca, East Pakistan found an innovative way to fight back. The Bengali’s revisited a century-old concoction of coconut water, carrot juice, carob flour and old bananas spiking rapid rehydration, healing the sick and ending the outbreak. This novel life-saving treatment of carbs, sugar and salt was later published in British medical journal, Lancet, and eventually made its way to a doctor in the US. The physician, based at the University of Florida, was working with the school’s football team, on how to best deal with oppressive heat and humidity his players faced during strenuous games. The doctor saw a common solution in rapid rehydration, if it worked for sick cholera patients, it would surely work for his healthy team, the Gators. Whipping up a formula of water, glucose, sodium and potassium, the genesis of the most popular sports drink in human history was created - Gatorade. Gatorade is a rare example of reverse innovation, an idea adopted first in the developing world, and defies gravity by flowing uphill to the developed world. It runs counter to the dominant innovation pattern we think first happens in places like Silicon Valley or New York. Reverse innovation pushes the performance paradigm, offering more for less while recognizing an entirely different user context. Around the world low-income rural villagers, measuring 3.1 billion people, represent half the world’s population and nearly $15 trillion in income. The fact is – globally the middle class is getting larger – but it’s really happening from the very bottom up. Engaging the frontier market rural consumer is the most important secular investment trend of the 21st century, and is at the heart of our investment framework. One of the important lessons of the past two decades has been the piv- otal role of innovation in economic development. Every industry dealing with information can be efficiently modernized – and disrupted with innovation. Innovation has globalized; business models and technology developed in one country can be easily exported to another. Orthogonal processes relevant in one industry are pertinent to others. Innovation makes a significant difference commercially addressing urgent develop- mental challenges such as universal access to electricity, rural cardiac care or better financial inclusion. In the next three years, smart phones will replace feature phones, and a billion frontier market consumers will be connected to the Internet. The most important challenges facing society today create commercial investment opportunities transforming commerce, education, and infrastructure management. With 21st century technology, rural innovation strengthens community resilience and creates two sources of alpha; sovereign and deal alpha. Our investees commercially leapfrog lives scaling basic, recurring needs. We painstakingly source, invest and enhance dominant local ventures building capabilities, marketplaces or payments passing the “toothbrush test,” an affordable B2C service used daily making life better, targeting the rural masses. Our process of creating new jobs and educational training is development. Obtaining a beta blocker solution when you have heart pain is an example of prosperity. Making sure every man, woman and child irrespective of socioeconomic status has access to a better life – that’s growth. The perceived tradeoff between returns and impact is a false dichotomy, there are tradeoffs with any strategy; but undervalued moats, when thoughtfully combined, propel pro-cyclical, virtuous sovereign growth. For the 3.1 billion village consumers around the world today, they won’t repeat the last 200 years of industrialization; we intentionally leapfrog development to build systems of the future, rather than the past. Mar- ket creating innovation, our area of expertise, transforms expensive and inaccessible offerings into cheap and accessible ones, enabling reach to an entirely new population of customers. By transforming previous rural non-consumers into consumers, market creating innovation turns the liabilities of developing nations - the diverse unmet need of her pop- ulace - into larger TAM assets for GMV capture. We build and capture significant IRR disrupting nonconsumption, helping entrepreneurs win hearts and minds while transforming real lives.