$100 Million Global Microfinance Investment Program Created

"We subscribe to the view that microfinance investing can contribute to a double bottom line," said Ed Grzybowski, TIAA-CREF's Chief Investment Officer. "GMIP, and this investment in ProCredit, gives us an opportunity to seek competitive returns through socially responsible investments that we believe have a low correlation to traditional equity and fixed income markets."

GMIP is part of TIAA-CREF's recently formed Social and Community Investing Department, which develops new socially oriented products, oversees the screening methodology of social screened funds, formulates policies around key social issues and manages community investment programs. GMIP is expected to invest $100 million over the next four years in a range of investment structures, asset classes and risk levels through MFI's.

"TIAA-CREF listens to its participants," said Scott Budde, Managing Director, head of the Social and Community Investment Department and manager of GMIP. "Our recent participant survey showed significant interest in proactive social investing and a desire to promote human rights and economic development. We believe GMIP and investments in microfinance institutions like ProCredit are an important step in that direction.

"GMIP found ProCredit an attractive investment opportunity because it has been one of the leading institutions in bringing a commercial approach to microfinance," said Budde. "They have a solid, profitable, and rapidly-growing business model with strong focus on economic development in emerging economies, including operations in post-conflict countries in Africa."

"In TIAA-CREF, we have found a strong private partner, who shares our long-term commitment to having a development impact with commercially-oriented microfinance banks," said CP Zeitinger, Chairman of ProCredit Holding Supervisory Board. "The capital provided by TIAA-CREF will help us to expand in Africa, Latin America and Eastern Europe, providing responsible banking services to many more low income families and small businesses. ProCredit is a fast growing, profitable institution and we had many options for raising capital but felt that TIAA-CREF was the best capital source."

The funding source for GMIP and the ProCredit investment is assets invested in TIAA Traditional, a guaranteed fixed annuity account with nearly $160 billion and 2.3 million investors. The largest portion of TIAA-CREF's ProCredit investment will be in newly issued shares of ProCredit Holding while the remainder will be in shares purchased from the International Finance Corporation, the largest multilateral provider of financing for private enterprise in developing countries. IFC will retain a significant minority shareholding in ProCredit Holdings AG, and continue to support the growth and development of the ProCredit Group.

Source: Yahoo Finance