Zephyr Management, LP (“Zephyr”), the parent company of the Manager, is a global private equity firm headquartered in New York. Zephyr specializes in establishing private equity funds in emerging markets around the world. IFC has invested in earlier Zephyr funds in the LAC and Africa regions.

Zephyr Peacock India Fund II has a target fund size of $75 million. IFC is proposing an equity investment of the lesser of $15 million or 20% of the Fund’s total committed capital.

15.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	15.0

* These investment figures are indicative

The Fund is a Cayman Islands exempted limited partnership, and will operate primarily through one or more subsidiaries formed in the Republic of Mauritius, which will acquire, own and operate the portfolio of investments. The Fund Manager is based in Bangalore, India and New York, USA.

An IFC investment in ZP II is expected to deliver the following development impact:

Stimulate private sector growth – ZP II is expected to expand access to financing by private enterprises, especially SMEs in Tier II, Tier III cities and rural India.

Stimulate job creation – ZP II is expected to provide much needed value-enhancing management and operations advice to high growth companies, which are expected to generate above-average rates of job creation.

Improve governance and build local institution – the Fund is expected to help portfolio companies adopt better practices in corporate governance, environmental and social standards, leading to improved sustainability.

IFC’s expected development contribution includes:

Capital mobilization – IFC’s commitment will help an emerging manager attract capital and reach a critical fund size.
Governance oversight – IFC expects to have a seat on the Fund’s Advisory Committee and to play an active role in ensuring that ZP II adopts best practice fund management and governance.

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 Performance Requirements 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

IFC will also review the capacity of the fund manager 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 an, 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 Performance Requirements
· Submit a periodic report to IFC as per a format to be provided by IFC

IFC will review the implementation and performance of the Fund’s SEMS for the first few projects, prior to the Fund’s investment, to ensure that the Fund’s SEMS is robust. For all Category A subprojects the Fund will need to satisfy IFC that the subprojects are in compliance with the Performance Standards or have a satisfactory action plan to bring the subprojects in to compliance within a reasonable time frame prior to investing.