49803 - Linzor Capital Partners IV L.P.

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Summary of Investment Information

Project Number

49803

Company Name

Linzor Capital Partners IV, L.P

Date SPI Disclosed

Jul 15, 2024

Country

Latin America and the Caribbean Region

Region

Latin America and the Caribbean

Projected Board Date

Aug 14, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jan 8, 2025

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Nov 11, 2024
Signed : Dec 12, 2024
Invested : Jan 6, 2025

Sector

Growth Equity Fund

Project Description

The proposed investment is for up to US$20 million, capped at 20% of total commitments into Linzor Capital Partners IV (“Linzor IV” or the “Fund”), a growth equity fund targeting US$250 million in commitments to make mid-market investments in the Spanish-speaking LAC, with a focus on Chile, Colombia, Mexico, and Peru. The Fund is managed by Linzor Capital Partners (“Linzor” or the “Fund Manager”).

Linzor will seek to build a portfolio of 6-8 investments, taking controlling or co-controlling economic stakes with ticket sizes ranging from US$20 million to US$50 million. Linzor IV will focus on three main investment themes: (i) digital transformation, (ii) underserved sectors and changing demographics, and (iii) resource efficiency. Sectors of focus are healthcare, education, telecom, financial services, and software.

Associated Advisory Engagement

There are no advisory services associated with this engagement.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

Development Impact

The Fund is expected increased access to private equity capital and value creation for mid-market companies in Latin America. PE investments in the region are increasingly Brazil-focused, with less observable investment activity in Spanish-speaking Latin America. Linzor aims to provide value creation to its portfolio companies through operational improvements, financial growth, geographic and business line expansion, top management recruitment, and enhanced E&S impact management. A material share of investees is expected to have a women-led or owned, thereby addressing gender gaps. IFC’s investment with Linzor IV will support an established fund manager to maintain its presence in the market, reenforcing the viability of the private equity fund model in the Latin America region beyond Brazil. IFC’s investment with Linzor IV will support an established Fund Manager to maintain its presence in the market, albeit at a reduced size, reenforcing the viability of the PE fund model in the LAC region beyond Brazil.

IFC’s additionality is both financial and non-financial. IFC's financial support will be required for the Fund to achieve its target final close. Fundraising in the Latin America is limited beyond Brazil, with macroeconomic uncertainty and risk concern making fundraising for funds with a regional mandate more challenging. Non-financial additionality involves non-commercial risk mitigation, by encouraging other investors to invest in the Fund, as well as standard setting to improve the gender diversity of both its investment team and portfolio companies. IFC will also look closely at providing advisory services to Linzor’s healthcare portfolio, including Quality Tool services and the DigiHealth platform.

E&S Category Rationale / Risks and Mitigation

The E&S risks and impacts of the Project are expected to be mostly OHS related and medium in E&S risk nature. The Project has been classified as FI-2. The Fund will not invest in coal related activities, oil & gas sectors or in any activities with significant E&S impacts such as (a) involuntary resettlement, (b) risk of adverse impacts on Indigenous Peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) significant occupational health and safety risks will not be eligible. IFC’s applicable E&S requirements for this project will be the Exclusion List, relevant E&S laws and regulations, and the IFC's Performance Standards (as applicable).

In accordance with IFC's Access to Information Policy, IFC will periodically disclose the names, locations and sectors of sub-projects that have been supported by IFC investments through private equity funds, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of January 1, 2025.

Investee	Country Of Investment	Sector
Wi-Net Telecom	Peru	N-BA- Internet Access Providers (Including ISPs, Datacenters)

Linzor has had an ESMS in place since 2023, which includes an E&S policy, an exclusion list, and related procedures and tools that define a framework for all its investments which are largely in line with the IFC requirements. As part of the appraisal, the Fund performs an E&S due diligence and if gaps are identified negotiates an ESAP with the target company, which is usually part of the 180-day plan. The E&S Officer is the Head of ESG & Impact function and reports directly to the investment committee. On the monitoring side, the fund receives annual reports from its portfolio companies and conducts regular site visits to review the companies' E&S performance and ESAP progress. The client has adequate channels to receive and respond to third party concerns.
As part of this transaction, the Fund will be required to: (i) maintain its ESMS to screen the potential investments against E&S requirements, (ii) submit first three E&S Due Diligences conducted prior to investment, (iii) disclose ESMS updates and applicable sub-projects, as well as (iv) report annually to IFC.

Contacts

For Inquiries About the Project, Contact

Linzor Capital Partners
Ana Giannareas
Partner

ana.giannareas@linzorcapital.com
Av. Bicentenario 3883, 5th Floor, Vitacura. Santiago, Chile.
https://linzorcapital.com

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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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