Washington, D.C., February 13, 2007—IFC
(International Finance Corporation), the private sector arm of the World
Bank Group, has approved an equity investment in Mexico’s Nexxus Capital
Private Equity Fund III, L.P., which will support midsize companies that
need a strong partner to help them improve their internal structure and
succeed in an increasingly competitive marketplace.
IFC’s financing is for the lesser of
$20 million or 25 percent. Nexxus Capital III is expected to raise
$200-250 million in funding to support six to 10 companies. The fund
may also invest up to 20 percent of its commitments in Central America.
IFC has become a strong brand recognized
in private equity funds in Mexico and Latin America and is seen as a partner
that adds value and sends a good signal to institutional investors. This
investment fits well with IFC’s strategy to support emerging local fund
“Shrinking bank lending in Mexico has
left middle-market companies with few funding alternatives. In this
context, private equity funds can be an essential source of funding and
management expertise for midsize companies, which are one of the largest
sources of employment in Mexico,” said Haydee Celaya, IFC’s Director
for Private Equity and Investments Funds.
Nexxus Capital Managing Partners, Luis
Harvey and Arturo Saval, stated that, “IFC has given us an extremely important
vote of confidence by investing with us, one of the first Mexican private
equity managers, for the third time. Although this is our third fund
raised for Mexico, it is the first to be raised and managed completely
by the local team. We expect to continue investing in the same type
of companies as during the last nine years, with investments in the $15-30
Nexxus Capital III Fund is sponsored
by Nexxus Capital, S.C., a Mexican company jointly owned by Luis Harvey
and Arturo Saval. Nexxus Capital invests in middle-market Mexican
companies that target the country’s rapidly growing middle-income population.
Nexxus Capital is the first all-Mexican private equity team and has
been very supportive of the asset class. The investment opportunity
for Nexxus Capital III centers on the rapid economic and demographic growth
in Mexico and the positive macroeconomic conditions that are in place.
IFC in Mexico:
Since 1956, IFC has invested $5.6 billion,
including $2.2 billion in syndications, in sectors ranging from infrastructure
and manufacturing to agribusiness and the financial sector in Mexico, making
it the region’s third-largest recipient of IFC financing in dollar value,
after Brazil and Argentina. IFC committed $260 million in FY06 in new financing
in Mexico, and it held a total portfolio of $1.1 billion, including syndications,
as of July 31, 2006.
IFC’s strategy for Mexico focuses on
enhancing the competitiveness of the private sector; further deepening
the financial sector with the introduction of specialized products and
markets; promoting investments in areas newly opened to private sector
participation; and promoting sustainable environmental and social development
and good corporate governance.
The Nexxus Capital fund is among a handful
of Mexican and regional private equity teams that first raised capital
in the mid-1990s and have successfully raised follow-on funds. Others
include Advent and Darby, both regional funds in which IFC is an investor.
IFC also recently committed to Carlyle Mexico, which will target
generally larger deals than Nexxus Capital fund. The private equity
opportunity in Mexico is considered sufficiently large, and the strategies
of these managers sufficiently diverse (as well as generally control-oriented),
that the funds’ respective portfolios are not expected to have significant
overlap, if any.
IFC, the private sector arm of the World
Bank Group, promotes open and competitive markets in developing countries.
IFC supports sustainable private sector companies and other partners
in generating productive jobs and delivering basic services, so that people
have opportunities to escape poverty and improve their lives. Through FY06,
IFC Financial Products has committed more than $56 billion in funding for
private sector investments and mobilized an additional $25 billion in syndications
for 3,531 companies in 140 developing countries. IFC Advisory Services
and donor partners have provided more than $1 billion in program support
to build small enterprises, to accelerate private participation in infrastructure,
to improve the business enabling environment, to increase access to finance,
and to strengthen environmental and social sustainability. For more information,
please visit www.ifc.org.