Washington, D.C., November 23, 2004—The
International Finance Corporation, the private sector arm of the World
Bank Group, has committed up to $11 million to Proa II Fondo, a $100 million
Chilean private equity fund. Proa II is a follow-on fund to Proa
I, a $47 million fund of 1995 vintage.
The fund plans to make 8 to 10 investments in mid-size Chilean companies
that are reorienting their focus to export markets, that service export-oriented
firms, or whose long-term competitive strategies are focused on developing
economies of scale. It will also make further investments in selected companies
that received funding from Proa I and that seek to broaden their businesses
through international expansion.
The general partner of the fund is Proa S. A. Administradora de Fondos
de Inversion. Proa S.A. is sponsored by and a subsidiary of Moneda,
one of Chile’s fastest-growing fund managers. Moneda currently manages
$446 million in assets.
Atul Mehta, IFC’s Director for Latin America and the Caribbean, noted,
“Proa’s success in raising its second fund is an important boost to the
Chilean private equity market. IFC is seeking to facilitate access
to financing for the country’s medium-size companies. We are confident
that this new fund, along with changes in legislation, will contribute
to the strengthening and growth of dynamic mid-market enterprises.”
Haydee Celaya, IFC’s Director for Private Equity and Investment Funds,
added, “Proa II's terms take into account lessons learned from successful
funds in other emerging markets. The terms include lower management fees,
shorter life, stronger fund governance, and environmental guidelines. IFC’s
support for Proa II sends a strong signal to the institutional investor
community and supports the Chilean government’s program to institutionalize
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.