Summary of Proposed Investment
Project Number
11616
Company Name
DARBY-BBVA LATIN AMERICAN PRIVATE EQUITY FUND, LP
Date SPI Disclosed
Jun 17, 2002
Country
Latin America and the Caribbean Region
Industry
other
Projected Board Date
Jul 30, 2002
Status
Active
Sector
Private Equity/Venture Cap Fund - Regional
Department
Equity Portfolio Management
Environmental Category
FI
Previous Events
Approved : Oct 8, 2002
Signed : Jan 17, 2003
Invested : Apr 29, 2003
Project Description
Project Description:
DBVA is designed to achieve superior returns by acquiring control/shared control stakes in undervalued middle-market Latin American companies. The portfolio is expected to comprise export/cross-border oriented companies and domestic market/consolidation oriented companies operating in sectors such as food and beverage, energy, non-bank financial services, branded products, media and outsourcing services.
Development impact:
Second tier companies in Latin America are affected by severe financing constraints and lack access to best management practices. The fund will contribute to the economic development of the region by supporting the development of these companies with equity finance and managerial and strategic support. This will be achieved through the active involvement of DBVA’s team of investment professionals, which have private equity and senior management experience, and through leveraging Darby and BBVA’s global private equity experience, industry expertise, and extensive on-the-ground network in Latin America.
After having peaked in 1998, private equity fund raising for the Latin American region has dropped sharply and is now back to pre-1994 levels. The fund, using a disciplined and thorough investment approach, will help demonstrate that the private equity model can be successful in Latin America, attracting further private equity resources to the region. If private equity is successful, public equity markets are likely to become increasingly viable.
The fund will contribute to the economic development of the region by supporting mid-sized companies. DBVA is well positioned in both Mexico and Brazil to invest in good mid-size companies that need a partner to help them succeed in an increasingly competitive global marketplace. The experience of DBVA''s team in investment, finance, corporate governance and environmental regulation will be important for the growth and development of these companies.
IFC role:
Over the past year, the international and regional economic environment has deteriorated decreasing investor confidence. IFC''s commitment to the fund will signal the Corporation''s support to private equity in Latin America at a time of increased investor anxiety. It will also help the fund reach a critical economic size and maximize its impact and demonstration effect. IFC will be involved in the fund''s Advisory Committee. IFC will play an important role in the definition of corporate governance and environmental standards at the investee company level, contributing to the sustainability of the fund''s investments.
DBVA is designed to achieve superior returns by acquiring control/shared control stakes in undervalued middle-market Latin American companies. The portfolio is expected to comprise export/cross-border oriented companies and domestic market/consolidation oriented companies operating in sectors such as food and beverage, energy, non-bank financial services, branded products, media and outsourcing services.
Development impact:
Second tier companies in Latin America are affected by severe financing constraints and lack access to best management practices. The fund will contribute to the economic development of the region by supporting the development of these companies with equity finance and managerial and strategic support. This will be achieved through the active involvement of DBVA’s team of investment professionals, which have private equity and senior management experience, and through leveraging Darby and BBVA’s global private equity experience, industry expertise, and extensive on-the-ground network in Latin America.
After having peaked in 1998, private equity fund raising for the Latin American region has dropped sharply and is now back to pre-1994 levels. The fund, using a disciplined and thorough investment approach, will help demonstrate that the private equity model can be successful in Latin America, attracting further private equity resources to the region. If private equity is successful, public equity markets are likely to become increasingly viable.
The fund will contribute to the economic development of the region by supporting mid-sized companies. DBVA is well positioned in both Mexico and Brazil to invest in good mid-size companies that need a partner to help them succeed in an increasingly competitive global marketplace. The experience of DBVA''s team in investment, finance, corporate governance and environmental regulation will be important for the growth and development of these companies.
IFC role:
Over the past year, the international and regional economic environment has deteriorated decreasing investor confidence. IFC''s commitment to the fund will signal the Corporation''s support to private equity in Latin America at a time of increased investor anxiety. It will also help the fund reach a critical economic size and maximize its impact and demonstration effect. IFC will be involved in the fund''s Advisory Committee. IFC will play an important role in the definition of corporate governance and environmental standards at the investee company level, contributing to the sustainability of the fund''s investments.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Julio F. Lastres, Managing Director
Darby Overseas Investments, Ltd.
Address: 1133 Connecticut Avenue, NW. Suite 400
Washington DC 20036
Phone: (202) 872-0500
Fax: (202) 872 1816
Darby Overseas Investments, Ltd.
Address: 1133 Connecticut Avenue, NW. Suite 400
Washington DC 20036
Phone: (202) 872-0500
Fax: (202) 872 1816