42527 - DARP SPV Jive

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Summary of Investment Information

Project Number

42527

Company Name

IFC FUNDO DE INVESTIMENTO EM COTAS DE FUNDO DE INVESTIMENTO MULTIMERCADO CREDITO PRIVADO

Date SPI Disclosed

Mar 30, 2020

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

May 12, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Aug 10, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Jun 3, 2020
Signed : Jun 30, 2020
Invested : Nov 23, 2020

Sector

Distressed Assets SPV

Project Description

The proposed project entails investing in the Brazilian distressed assets market in partnership with Jive Investments Consultoria Ltda (Jive or the Company). The project will consist of an investment in a special purpose vehicle, to be established by Jive and IFC, to acquire distressed assets (DARP SPV Jive) (the Project)

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	88.30

Development Impact

- Stakeholders impact: The project will support the acquisition and resolution of Target Assets in Brazil, by allowing financial institutions to offload distressed assets. This will allow them to release capital, decrease their liquidity needs, which will strengthen the capacity of these financial institutions to increase lending. It will also help Brazilian borrowers normalized their defaulted obligations, regain access to credit, and return to active participation in the financial system. The Project will also support SMEs, many times in financial distress, by acquiring their existing legal claims and precatÃ³rios. By acquiring these assets directly from SMEs, the Project will provide immediate liquidity to them. - Market impact: IFC expects the Project will contribute to the further development of the Brazilian distressed assets market by supporting Jive, which serves the Target Assets that are not currently actively resolved in the market in an efficient manner.

IFC's additionality in the Project comes in three forms: (i) financing structure: IFC will commit US$80 million to the DARP SPV Jive to support the growth of Jive in an efficient manner, increasing its capacity to resolve a larger volume of Target Assets in Brazil and (ii) standard setting: IFC will share global best resolution practices with Jive in addition to the implementation of the applicable IFC's E&S Performance Standards and the strengthening of cybersecurity standards.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Project consists of a quasi-equity investment in a DARP SPV to be managed by Jive that will acquire distressed assets. These assets involve legal claims owned by distressed companies against Brazilian federal and sub-national governments, individual distressed companies, distressed real estate portfolios and portfolios of distressed companies and individual debts. As the assets have mostly low to medium E&S risks, the Project has been classified as Category FI-2 according to the IFC's Sustainability Framework. The business activities supported have limited adverse E&S risks or potential impacts that are few in number, generally site specific, largely reversible, and readily addressed through mitigation measures. There is, however, a very limited number of existing exposures to companies operating in higher risk sectors. The Project will not support any coal-related activity.

The main E&S risks and impacts related to the Project derive from the Company’s capacity to manage E&S risks related to the distressed assets listed above. These risks may involve sub-standard organizational health and safety procedures, poor labor and pollution prevention practices, retrenchment and liabilities related to community impacts and evictions. The Company currently has a basic E&S procedure to assess compliance with national E&S regulations. In addition, it conducts a detailed legal review of each company based on public information. Given the specificities of this Project, E&S requirement may be enhanced in case the Company alters significantly the nature of its business.

Summary of Client Environmental and Social Management System (ESMS)

As part of the Project, Jive will be required to enhance its ESMS in line with the IFC Exclusion List, Brazilian E&S laws and regulations and the IFC Performance Standards, as applicable, and provide staff training. However, due to the nature of the Company’s relationship with sub-clients, leverage to enforce the application of some of these requirements may be limited. To mitigate this, E&S assessments of individual companies will be improved and sub-projects involving involuntary resettlement, risk of adverse impacts on Indigenous Peoples, significant risks or impacts on the environment, community health and safety, biodiversity, cultural heritage or occupational health and safety will not be eligible. Jive will also be required to hire a qualified external consultant to assess the E&S risks of applicable transactions and to submit a periodic report to IFC.

Contacts

For Inquiries About the Project, Contact

Jive Investments Consultoria Ltda.
Marcelo Martins
Managing Partner
+55 11 3500-5061
mm@jiveinvestments.com
Avenida Brigadeiro Faria Lima 1485, 17th floor, Torre Norte
jiveasset.com.br

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Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Title & Description	Anticipated Completion Date
Staff Training	11/25/2020
ESMS enhancement	05/29/2020
Enhance HR Policy and Procedures	11/25/2020
Nominate E&S officer	05/29/2020

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