WASHINGTON, D.C., Apr. 25 -- The International
Finance Corporation (IFC) has approved equity investments in Pionero Fondo
de Inversion Mobiliaria, a Chilean closed-end equity fund, and Moneda Asset
Management S.A., the asset management holding company that will launch
and manage Pionero.
The first of its kind to be established in the Chilean market, the Pionero
Fund will invest in small and medium-sized Chilean companies listed on
local stock exchanges. Pionero will be listed on the Santiago Stock Exchange
for an initial term of ten years, which may be extended for two additional
"Pionero will contribute to capital market development in Chile by
giving foreign and domestic institutional investors a chance to invest
in second-tier Chilean companies," according to Julio Lastres, Manager
of IFC's Latin America and Caribbean Capital Markets Division. "This
will increase the liquidity of these companies, enhance their value, and
encourage more of them to use local equity markets for their financing
IFC will invest up to US$10 million or up to 25 percent of Pionero's capital
and in up to 20 percent of Moneda's share capital. Pionero is the first
fund developed by Moneda, which was formed in response to increasing demand
for more professional asset management and more specialized investment
vehicles in Chile. IFC is supporting Moneda's local sponsors -- Mr. Sergio
Undurraga, a local fund manager, and Larrain Vial, a Chilean stock brokerage
firm -- in their efforts to establish a company that will offer local and
foreign investors specialized services in areas such as equity funds for
companies with small market capitalization, equity funds for private (non-listed)
companies, and fixed income funds.
This investment is part of IFC's strategy to strengthen local capital markets
in Latin America by fostering the development of financial institutions
and fund management capabilities. Recent reforms in Chile's capital markets
laws have promoted the development of funds similar to Pionero.
IFC is the private sector arm of the World Bank Group and the largest multilateral
source of financing for private sector projects in developing countries.