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. Since 1994, Zephyr has sponsored, co-sponsored or managed nine emerging markets private equity funds with total commitments of $1.15 billion.

Zephyr Peacock India Fund III has a target fund size of $150 million. IFC is proposing an equity investment 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 Mauritius private limited company, 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.

(i) Support of SMEs: Target investee companies will be SMEs, which are capital constrained and have very limited access to bank debt or the public markets to finance their growth strategies
(ii) Jobs: Investments in SME companies entering a growth phase leads to a substantial impact on job creation at a rate faster than the national average
(iii) Private sector development: Addition of value to portfolio companies by means of improved corporate governance and transparency while providing financial and operating expertise, evaluating new lines of business and sourcing strategic partners
(iv) ESG: Incorporating IFC environmental and social standards, thereby contributing to sustainable economic development

(i) Catalytic role - IFC''s second commitment to a quality Fund Manager would act as a stamp of approval and will help mobilize other sources of capital to ZP III, contributing to a successful closing.
(ii) Global expertise - IFC has extensive experience financial services, infrastructure services, manufacturing, pharmaceuticals and information technology sectors and will be able to share best practices with the Fund. In addition, IFC will help implement corporate governance and environment and social standards in the Fund.
(iii) Demonstration effect - IFC''s support will catalyse further interest in equity funding for capital constrained SMEs looking for growth capital and functional expertise to scale up.

This project appears to be a Category FI project. During appraisal, IFC will analyze the fund’s expected portfolio and business strategy 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: · Upgrade, if required, the existing SEMS prior to commitment 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 three projects, 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.