The Fund will be managed by Aureos Latin America Managers Limited (the Fund Manager) who will engage affiliates as sub-advisors in each of the Target Regions, to be staffed by experienced local investment professionals with good reputation and strong networks in their respective business communities. The Fund will benefit from the support services provided to the Aureos Group by professionals at Aureos Advisers Limited (AAL) and Aureos (Mauritius) Advisers Ltd (AMA) (AAL and AMA collectively the Central Team), each of which is a wholly owned subsidiary of Aureos Capital. Aureos Capital is a Mauritius-based global private equity fund manager which focuses on SME investments in emerging markets. The Central Team will provide technical and operational support to the local investment teams throughout the life of the Fund.

The Fund has a target size of $300 million. It is proposed that IFC invest up to $20 million.

20.0 million (USD)

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

* These investment figures are indicative

The Fund will be formed as an Ontario-limited partnership and will have local investment teams based in Mexico, Central America and the Andean Region, who will be supported by a small regional team likely to be based in Central America, whose primary focus will be to ensure that sectoral synergies and cross border transaction opportunities throughout the Target Regions are maximized. The Fund will seek investment opportunities primarily in Mexico, Central America and the Andean Region.

The Fund is expected to have a strong impact for private sector development because of the Fund’s focus on high-growth industry sectors: -- Support of SMEs: The Fund is expected to allocate part of its commitment to SMEs. --Private sector development: The Fund will add value to its investee companies, by providing managerial and strategic support to improve their competitiveness and sustainability --Economic development: The Fund is expected to invest in high-growth companies aiming to increase output, which in turn should lead to increased employment rates. --Environmental practices: The Fund Manager will adopt international best practices for environmental and social risk assessment and management, and improve transparency and corporate governance, thus transferring knowledge and skills to portfolio companies

IFC’s role includes: -- Catalytic role mobilizing additional institutional capital: IFC participation is crucial to help the Fund achieve a first closing, reach a minimum size to implement its strategy, and increase its chances of raising additional capital from private sources. -- Providing input on fund structure and terms: IFC will help the Fund Manager attract private capital in subsequent closings by implementing market standard terms. -- Improving corporate governance: Through its participation on the Fund’s Advisory Board, IFC will play an active role in assisting the Aureos team adopt best practice corporate governance, environmental and social standards at the Fund and portfolio company level.

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 Social and Environmental Laws and regulations and/or
-- The IFC Performance Standards

The Fund will likely apply Aureos Capital''s Social & Environmental Management System (SEMS). IFC will review ALAF’s proposed portfolio against the SEMS and suggest Supplemental Actions to address any gaps in the SEMS if required.

Based on the Applicable Performance Requirements and SEMS and capacity review, ALAF will be required to:

-- Upgrade if necessary, its 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 Performance Requirements
-- Submit a periodic report to IFC as per the standard Aureos reporting format provided by IFC for previous investments