When impact investment funds began to emerge in the early 2000s, they were small in number and size and often had trouble attracting capital from institutional investors. “People have always assumed that what we do is help nice, small social enterprises filled with do-gooders,” says Andrew Kuper, president of LeapFrog Investments, one of the world’s biggest impact private equity funds. But with $340 million LeapFrog having finalized the first close of its second fund last August, there are signs that impact investing, which aims to generate social and environmental impact as well as financial returns, may finally be coming of age after long being viewed as a purely development-focused, not-for-profit strategy.

“Five years ago it was not so easy to get capital on board,” recalls Kuper, who co-founded the Johannesburg-based firm in 2007 with four others, all refugees from the mainstream financial industry or academia. “But now there’s a real track record in the sector of portfolio building, of performance, of exits and of the competitive advantage of purpose. This is a new type of alpha.”

Kuper says it took LeapFrog 18 months “from having a pitch book to first close” for its first fund but just eight months for the second. The first vehicle, which eventually raised $135 million, reached $40 million at first close; the second is already at $204 million, although Kuper won’t disclose his firm’s final capital-raising target.

The new fund will give LeapFrog, which invests in companies offering insurance and related services to low- and middle-income consumers across 14 countries in Africa and Asia, the ability to strike larger deals and tap more meaningfully into the rise of what Kuper terms the world’s three billion emerging consumers. “Investors are looking for a window into the emerging-markets consumer,” he says, citing a recent report by consulting firm McKinsey & Co. which projects that by 2025, emerging consumers will constitute an annual market worth $30 trillion, versus about $12 trillion today.“They can see the destiny of these countries and the world.”

Industry estimates put the size of the impact investing market at anywhere between $10 billion and $50 billion. Other leading funds, which include U.S. outfit MicroVest Capital Management and Bridges Ventures, a London-based firm with more than $550 million in assets, have taken a multistrategy approach, focusing on several sectors at once and often combining debt and equity investments. LeapFrog’s success in raising capital suggests that as the emerging-consumer class grows, there will be greater merit to maintaining a strict sectoral focus. “It is much higher value both for investors and portfolio companies to have a specialist fund because the market in emerging markets is potentially huge, it’s very underdeveloped and there’s a huge scope for growth in very specific sectors,” argues Edvardas Bumsteinas, Luxembourg-based head of the microfinance unit at the European Investment Bank.