The Frontier Fund will be managed by Brummer & Partners Asset Management (Bangladesh) Ltd (“B&P Bangladesh” or the “Advisor”), a Bangladesh limited liability company, a subsidiary of Brummer & Partners, AB, Sweden, a well-known Scandinavian fund manager.

The project is a proposed IFC equity investment of the lesser of $10 million or 20% of the committed capital of the Fund.

10.0 million (USD)

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

* These investment figures are indicative

The Frontier Fund is structured as a Bermuda-registered exempted mutual fund company. The Manager’s investment team are based in Dhaka, Bangladesh and are a combination of local and international investment professionals.

This project is in line with IFC’s overall strategy in Bangladesh, a frontier IDA country, which prioritizes an investment program for the development of capital markets and institution building, infrastructure, general manufacturing and services and innovative projects in health and education. In addition, the project is expected to have the following development impact:

Employment growth: The Fund is expected to invest in growth companies that will generate new jobs.
Support for SMEs: This Fund will support equity investment in small and mid-sized companies, most of which are expected to qualify at the time of investment as SMEs under the World Bank Group’s definition.
Strengthen Corporate Governance: With the help of IFC, the Fund manager will draw on a list of corporate governance initiatives and screens to pursue with investees. The Fund will help implement practicable steps in improving the corporate governance of investees through activist investing and monitoring.

Through its investment in the Fund and participation on the Advisory Board, IFC will have the following contributions:

- support a first-time fund management team in Bangladesh
- introduce a new asset class/ financial product to Bangladesh
- supply growth capital and professional management advice to investee companies of the Fund
- utilize the Fund as a vehicle with which to actively implement improvements in corporate governance in investee - companies on both the listed and private side of the Fund’s operations. As the Fund is the first such of its kind in Bangladesh, it is expected to raise the awareness of corporate governance in general in the private sector in Bangladesh.
- allow IFC to leverage its own capital with third-party funds

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.