The Fund will be managed by Mongolia Opportunities Partners Limited (the Manager), a joint-venture between Enviar Capital Limited (Enviar), and APC Frontier Management Company Limited. Enviar, established in 2010, is founded by former senior staff of the Asian Development Bank. The key members of Enviar have been active in Mongolia since early 2000. APC Frontier Management Company Limited is an affiliate of Asia Pacific Capital (APC), active in Asia since 1992 and the manager of two Asia-focused private equity funds. The partnership of Enviar and APC combines Enviar’s local network and Mongolia-specific expertise with APC’s private equity and fund management experience in Asia.

IFC proposes to make an equity investment of up to $7.5 million in the Fund, not to exceed 20% of the total commitments of the Fund.

7.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	7.50

* These investment figures are indicative

The Fund’s target investments will be in Mongolia. The management team will be based in Ulaanbataar, Mongolia with support from an APC team based in Hong Kong. The Fund and the Manager will be established in the Cayman Islands.

The Fund is expected to deliver strong development impact through (i) supporting undercapitalized SMEs in Mongolia; (ii) demonstrating successful private equity investing in Mongolia, a priority IDA country, (iii) building confidence amongst institutional investors to invest in Mongolia; and (iv) mobilizing co-investment from strategic international investors.

IFC's early involvement in the Fund is expected to have a catalytic effect, attracting other institutional investors to invest in the Fund, hence helping the Fund to achieve its target fund size. In addition, IFC will help improve the Fund structure, bring international best practices in corporate governance, and share resources and knowledge for capacity building of the fund manager. Finally, IFC will help the Fund develop a robust Social & Environmental Management System (SEMS) as part of the Fund’s environmental and social (E&S) operations and compliance requirements.

The project has been classified as a category FI project according to IFC’s E&S review procedure. For a first time fund, the appraisal will focus on: management team selection and experience; investment eligibility criteria and approach to due diligence process; and approaches to portfolio management in minority stakeholder positions.

An SEMS, appropriately scaled and resourced, will be required as a condition of IFC’s investment. This must include assignment of responsibilities and accountabilities for E&S issues, implementing procedures and processes, access to consultants and other technical expertise as needed, training, monitoring and review processes against performance benchmarks (compliance to national laws and regulations, IFC’s Exclusion List, Performance Standards and relevant sectoral guidelines). Additionally, IFC will need to retain the right to (1) review the implementation and performance of the SEMS for the first few sub-projects, prior to the Fund’s investment decision, (2) for all Category A sub-projects, the Fund will provide IFC with prior notification at which point IFC can request further information OR (3) for all Category A sub-projects, IFC will retain the right to review all such proposals. The approach to sub-project review (including notification and/or review turnaround times) will be determined during appraisal. The purpose of such notification and review is to assure IFC that the Fund’s management processes will result in sub-project compliance with the applicable requirements.