Aureos was established in 2001 as a joint venture between CDC and the Norwegian Investment Fund for Developing Countries (Norfund). In December 2008, Aureos employees completed a management buyout of Aureos from the two founding shareholders, CDC and Norfund. Aureos currently has over 90 investment professionals with experience in industry, consulting, corporate finance, investment banking, accountancy and private equity located throughout a network of 28 offices focused on investing across Asia, Africa and Latin America. The Fund will be managed by Aureos South-East Asia II Managers Limited which will be advised by local investment professionals (Investment Team) with operational and technical support from staff in their Mauritius, London and Singapore offices.

Aureos South-East Asia Fund II seeks to raise $200 million and held a first closing in March 2011 with $86.2 million in commitments. IFC proposes to invest equity of up to $25 million in the Fund in a second closing.

25.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	25.0

* These investment figures are indicative

Aureos South-East Asia Fund II LP will be a limited partnership formed under the laws of the Province of Ontario, Canada. The Fund’s Investment Team will be based in five of the Target Countries (Thailand, Philippines, Indonesia, Malaysia and Vietnam) and will be led by a Jakarta-based Managing Partner.

(1) Support the Development of SMEs. The Fund is expected to invest in small and medium-sized enterprises in the Target Countries. The Fund will address a major constraint faced by SMEs by providing access to finance through equity and quasi-equity instruments. In addition to its capital investment, the Manager expects to provide hands-on support to strengthen the management capacity, develop new information systems, improve accounting and financial systems, and play an active role in identifying new market opportunities and potential acquisition targets.
(2) IDA countries. The Fund intends to invest in SMEs located in IDA countries such as Cambodia, Laos and Vietnam.
(3) Promote Private Sector Development and Create Jobs. The Manager is expected to source quality SMEs that can generate employment and accelerate growth enabling them to become local and regional market leaders. Furthermore, the successful execution of the Manager''s strategy will attract additional funding sources from the private sector to help narrow the funding gap experienced by most SMEs.

(1) Mobilization of Additional Commitments. IFC''s investment will have a catalytic role in allowing the Fund to unlock commitments from existing investors that are subject to certain minimum fund size requirements and will encourage other private sector investors to join in the second closing. IFC''s investment and mobilization of additional commitments will help the Fund achieve a target fund size that will commercially support its investment activities with market-based fees and management costs.
(2) Improvement of Environment and Social (E&S) standards. IFC has provided Aureos support in improving E&S standards for previous Aureos funds in which IFC was an investor. IFC will now confirm that the best practice standards are incorporated into Aureos'' process and procedures, implementation of the E&S program is taking place and that Aureos remains focused on enhancing the development impact of its investments.
(3) Long-term Partnership. IFC''s investment will strengthen its relationship with Aureos further and will enable it to expand its equity investments in SMEs which are critical to the growth and development of the Target Countries.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Aureos Capital Limited is an existing IFC client and has developed and implemented an organization-wide SEMS. Outstanding environmental and social issues with the existing funds in which IFC invests should be followed up prior to the disbursement for this project.

IFC analyzed the proposed portfolio for types of transactions, size, tenor and industry sectors and determined the Applicable Performance Requirements as: the IFC FI Exclusion List, the applicable national social and environmental laws and regulations, and the IFC Performance Standards.

IFC is also reviewing, the capacity of the FI to implement a Social & Environmental Management System (SEMS) and manage social and environmental risks. If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS. Based on the review, the project will be required to: (i) upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC; (ii) identify responsible, qualified persons to manage and implement the SEMS; (iii) commit to implement the SEMS, to ensure that its investments are in compliance with the Applicable Performance Requirements; and (iv) submit a periodic report to IFC as per a format to be provided by IFC.