Santiago, Chile/ Washington, DC, June
14, 2016—IFC, a member of the World Bank Group, and the IFC Financial
Institutions Growth Fund (FIG Fund), a private equity fund managed by IFC
Asset Management Company (AMC), signed today a $140 million equity investment
in Consorcio Financiero to support its growth in the banking and insurance
sectors in Chile as well as its regional expansion, mainly in the Andean
region. IFC will invest $100 million and the FIG Fund $40 million.
This new capital injection will help expand
Consorcio Financiero’s banking operations to increase access to finance
for medium-sized companies and large projects in Chile. The investment
will also boost the insurance sector, which is essential for deepening
capital markets and deploying long-term funds into the economy, thus supporting
growth and infrastructure development. IFC started its support to
the Consorcio Financiero group last year when in May it provided $60 million
to Banco Consorcio to enhance the bank’s lending program for renewable
energy projects in Chile.
Marcos Büchi, Chairman of the Board of Consorcio
Financiero, said. “It is very important for Consorcio to have such a high
level partner like IFC, which brings vast knowledge on the regional financial
markets and unique international experience. This will help us strengthen
our business development positioning and our corporate governance practices.”
Büchi also noted that “Consorcio values this new strategic partnership
with IFC, in particular now when we commemorate our 100th anniversary
and are taking on new challenges by expanding in the insurance and banking
markets in Chile and the region.”
Although demand for insurance is growing
in Chile, there is still room for increasing the reach of insurance coverage
for both individuals and companies. For example, Chile’s life insurance
penetration rate is only 1 percent of GDP if annuities are excluded. Increased
insurance coverage for companies and investors will also allow them to
take more risks and grow, while protecting productive assets and income.
“Through this investment, we are supporting
Consorcio Financiero’s expansion plans in Chile and into other countries
in Latin America, as well as enhancing access to insurance, particularly
to households and to sectors that create jobs and contribute to economic
growth,” said Marcelo Castellanos, IFC Manager for the Financial Institutions
Group, Latin America and the Caribbean. “With this new investment, IFC
continues to bring its recognized industry expertise and experience supporting
the development of financial markets in Chile and globally.”
Tim Krause, Co-Head of the IFC Financial
Institutions Growth Fund, also noted: “The FIG Fund looks forward to working
with Consorcio to support its growth strategy in the insurance and banking
sectors in Chile and the Andean region.”
IFC’s strategy in the insurance sector aims
to develop and increase access to insurance products and risk management
solutions in emerging markets at both the corporate and individual levels.
By extending the reach of insurance, IFC aims to help enable businesses
and investors to assume more risk and achieve stronger growth; contribute
to deepening capital markets, in particular through long term life insurance
savings products and pensions; and increase individuals’ social and financial
stability by protecting them against unplanned or catastrophic disasters.
Local capital markets evolve as insurance companies reach a significant
volume of contractual savings. In the past five years, IFC invested US$656
million in the insurance sector in Latin America, out of which 30% relate
to equity investments in pension providers, 28% in health insurers and
17% in life insurers.
IFC, a member of the World Bank Group, is
the largest global development institution focused exclusively on the private
sector. We help developing countries achieve sustainable growth by financing
investment, mobilizing capital in international financial markets, and
providing advisory services to businesses and governments. In FY15, IFC
invested nearly $18 billion, including more than $7 billion mobilized from
other investors and leveraging the power of the private sector to create
jobs, spark innovation, and tackle the world’s most pressing development
challenges. For more information, visit www.ifc.org.
About IFC Asset Management Company
IFC Asset Management Company LLC (AMC), a
wholly-owned subsidiary of IFC, invests third party capital, enabling investors
to benefit from IFC’s expertise in achieving strong equity returns, as
well as positive development impact in the countries in which it invests.
AMC has raised $8.7 billion of capital across 11 investment funds. For
more information, visit www.ifcamc.org.
About IFC Financial Institutions Growth
The FIG Fund makes minority equity and equity-like
investments in financial institutions in emerging markets globally, responding
to an identified market gap between investors who have limited access to
opportunities in emerging markets and financial institutions that are in
need of equity capital to finance growth. For more information, visit www.ifcamc.org
About Consorcio Financiero
Consorcio is a leading player in the financial
sector in Chile with an important footprint in life insurance. It operates
through two life insurance companies (Compañía de Seguros de Vida Consorcio
Nacional de Seguros S.A., and CN Life Compañía de Seguros de Vida S.A.),
a property and casualty insurance company (Compañía de Seguros Generales
Consorcio Nacional de Seguros S.A.); and Banco Consorcio, a universal bank.
Consorcio Financiero has recently acquired a 40.1 percent stake in La Positiva,
a life insurance company in Peru. As of December 2015, Consorcio Financiero
had $11.9 billion equivalent in assets, $1 billion equivalent in equity,
and an annual net income of $135 million equivalent. Consorcio is rated
“AA” by Feller Rate and “AA-” by Fitch (Chilean scale). For more information,
please see: https://www.consorcio.cl/.