Avigo Capital Partners is an independent private equity group created in 2004 by Mr. Achal Ghai, a veteran in private equity and investment banking from multi-nationals such as ICICI, American Express, HSBC & CIBC World Markets, to build a network and invest in Indian SMEs. All the investors in Fund I were Mr. Ghai’s personal contacts. Fund II senior members of the team have worked together at some point in their careers. The two General Partners of the Avigo team have worked together for the last 3.5 years in building the firm and managing the Avigo SME Fund I and II. There have been significant additions to the team in the last one year and currently the 10 investment professionals in place together bring decades of experience in private equity, investment and corporate banking, industrial and engineering management, operations, and marketing.

The Fund has a target size of $100 million and it is proposed that IFC invest up to $10 million.

10.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	10.0

* These investment figures are indicative

The Fund is a trust in India registered under SEBI, the Indian securities regulator, managed by Avigo Capital Partners. The Fund will be headquartered in New Delhi and investments will be made all across India.

- Supporting a fund that will invest in SMEs:

IFC has not found model to invest directly in SMEs in a cost-efficient manner, and uses collective investment vehicles as the primary tool to provide SMEs with equity.

- Supporting the development and growth of local entrepreneurship:

The Fund will provide equity financing and management expertise to SMEs with high-growth potential.

- Strengthening an emerging domestic fund manager:

This is effectively a first time team scaling up operations from its prior fund.

- Encouraging global best practices in the fund management industry:

The Manager is deliberately trying to apply best practices to the Fund’s governance and also sees governance as a critical element in increasing the value of its investee companies.

- Investing in SMES:

Although numerous fund managers have appeared in India in the past couple of years, only a handful focuses on SMEs.

- Catalytic role mobilizing foreign institutional capital:

An IFC investment will help the Fund achieve a successful closing with international investors and reach the size necessary for sustainable operation of the Manager.

- Provide input regarding fund structure and terms:

Drawing from previous experience with the onshore/offshore structure for Indian funds, IFC will work with the Manager to adopt best international practices and terms that will attract additional private capital.

- Improve corporate governance:

Through its participation on the Fund’s Advisory Board, IFC will play an active role in assisting the Manager to adopt best practice corporate governance and environmental and social standards at the Fund and portfolio company level.

- Assist in exits:

SME funds often exit to larger funds, and IFC plans to use its extensive network of direct investments and to mine its new investee database to generate appropriate exit leads

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the fund’s expected portfolio and sectors of investment and determine the Applicable Requirements if any, that would include a combination of:

- The IFC FI Exclusion List; and/or
- The applicable National Environmental and Social Laws and regulations; and/or
- The IFC Performance Standards.

IFC will also review, if required, the capacity of the fund to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required.

The Fund Manager will be required to:

- develop, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
- identify responsible, qualified persons to manage and implement the SEMS
- commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Requirements;
- take action to remedy any gaps in SEMS implementation on an ongoing basis;
- submit a periodic report to IFC in a format to be provided by IFC .