British International Investment

Lok Capital

Anchoring a fund

We helped establish one of India’s leading impact investors by backing them from the beginning.


India’s Lok Capital is a pioneer in impact investing, having launched its first fund, Lok I LLC, in 2006.

We were an anchor investor in both that fund and its successor, Lok Capital II, helping to attract a total of $87 million for investment in new and established Indian microfinance institutions. These companies have helped to provide financial services, healthcare, and education to low-income entrepreneurs and micro-businesses across the country.

Here, Venky Natarajan, Lok Capital’s Managing Director, discusses our long-standing relationship with Lok Capital and how it has evolved.

An important anchor investor

Venky explains, “CDC was one of the anchors in Lok I; one of the first of its kind of impact investing funds. We were talking to several DFIs and, through some of our contacts, we approached CDC. It was our first fund as a team and without CDC we probably wouldn’t have been able to kick off.”

Support during the early days

But as Venky recalls, we provided more than investment to him and his team in those early days: “CDC held our hand throughout the process, particularly with many of the best practices in terms of setting up and managing the fund. CDC also put us in touch with other investors and played a very important role.”

Since that time, Lok Capital has gone on to raise its third successful fund, while we have expanded our team and the diversity of the investment products we offer. Venky says,“Back then CDC had just one product. Now it provides direct equity and direct debt to portfolio companies, and there is also an impact fund. The range of products is quite vast today, which has been helpful to us.

“For instance, CDC has developed a very strong debt portfolio. This fulfils an important need, as more traditional commercial equity may not be suitable. CDC also has products with a more developmental orientation, and again we are able to approach CDC to help fulfil those needs. Clearly, CDC has evolved its product portfolio quite a bit.”

While Lok have had many successful investments since 2006, Venky points out that CDC is still the first port of call if anyone at Lok Capital needs guidance.

He recalls,“While raising our second fund in 2010-11, one of the smaller partners wanted to get out, due to a large macro event in the market. CDC stepped in and helped us, going above and beyond its responsibility in helping with this fund. Time and again the team has demonstrated that.”

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