IFC supported the creation of Alta Growth Capital Management (the “Fund Manager”) in 2007 as a partnership comprising members of the former Baring Mexico Private Equity Partners (Mexico, Project No. 9357, 4594 ) S.C. and vSpring Capital. In the past five years the Alta team has worked cohesively and raised $135 million in capital commitments distributed in three funds: i) $75 million in Alta Growth Capital, Mexico Fund, L.P. (2007); ii) $60 million in an early-stage funds (2011), Alta Ventures Mexico Fund, L.P. (Project No. 28086) which includes the Kickstart program, a seed capital facility that supports innovation. The Alta team has also created a strong network that brings together industry experts, executives, entrepreneurs, and capital sources behind the funding and mentoring of seed, venture and growth investments. The Alta Growth team is based in Mexico City, and is composed of the following senior professionals: Erik Carlberg (Managing Director), Scott McDonough (Managing Director), and Rafael Payro (Managing Director). Other team members are: Burton Flynn, Roberto Henriquez, and David Oscos. The Fund is proposed as a Canadian limited partnership formed under the laws of Ontario. A first close is expected to bring $85-105 million from new and recurring investors.

The target fund size is $150 million. It is proposed that IFC be an early equity investor with up to $15 million.

15.0 million (USD)

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

* These investment figures are indicative

The Alta Growth team is based in Mexico City.

Alta Growth Capital Mexico Fund II, L.P. is targeting equity investments in 10-15 SMEs that will be supplemented with environmental, managerial and technical value addition. Private equity-sponsored companies often adopt management practices (in environment and social, financial control, cost accounting, quality control, corporate governance, legal structure and tax reporting) that are better than those used by their local peers. If Alta Growth is successful and delivers developmental and financial results for its investors, it may be able to launch successor funds. Examples of successful, well-run private enterprises will contribute to encourage foreign investment in Mexico. The Fund is expected to contribute to a vibrant and sustainable private sector that will improve employment, trade balance, and public finances in Mexico. Finally, by attracting new investors to the private equity asset class ─local pension funds, insurers and investment companies, the Fund will help these companies to achieve higher risk adjusted returns as well as the implied benefits that private equity brings into their overall portfolio. The IFC team will measure and report on the following developmental impact indicators: 1) percentage of funding disbursed, 2) net/gross financial return, 3) number of jobs created, 4) annual growth sales, 5) annual growth EBITDA, 6) launching of follow-on funds, 7) tax paid to local governments, among other indicators.

IFC''s early support to Alta Growth Capital Mexico Fund II, L.P. is expected to encourage both local and foreign investors to invest in the Fund. IFC and vSpring -a US venture capital team, are cornerstone investors in Alta Growth. vSpring decided to focus on the US activities only which means they will not invest in Fund II. Without any exits in Fund I, Alta Growth needs the support of recurring investors to go attract other investors. Therefore, IFC''s support is crucial in fundraising efforts of Fund II.

IFC will: 1) invest in equity financing; 2) negotiate co-investment rights for IFC direct business; 3) provide/send a signal of approval to potential investors; 4) update and monitor that the Fund and portfolio companies abide by IFC''s environmental and social (ESMS) and corporate governance standards. IFC has selected to support the Alta team because of their expertise in helping companies and entrepreneurs grow. IFC will monitor its catalytic role by tracking fund mobilization and will confirm the upgrade of the ESMS.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Under "Fund I" (Project No. 25352) the Fund Manager was required to develop an Environmental and Social Management System (“ESMS”) to ensure sub project compliance with IFC’s Exclusion List, host country Environmental and Social (“E&S”) laws and regulations, and the IFC Performance Standards (the Applicable Requirements). During appraisal IFC assessed the potential E&S risks and impacts associated with the new Fund''s expected portfolio and sectors of investment, which may include Healthcare, Logistics, Consumer Goods, Food, Financial/Business Services, Education, and Housing, some of which may have moderate to significant E&S risks.

IFC also reviewed the Fund Manager''s capacity to manage the expected E&S risks under IFC''s existing E&S risk management framework for private equity funds. As part of the investment in Fund II, IFC will suggest adjustments to the ESMS to address the gaps identified during appraisal as well as the new E&S requirements that came into effect since the investment in Fund I.

The Fund will be required to: enhance its existing ESMS to ensure that its investments/activities are in compliance with the Applicable Performance Requirements; identify responsible, qualified persons to manage and implement the ESMS; and submit a periodic report to IFC.

IFC will review the implementation and performance of the Fund''s ESMS for the first three projects and all Category A projects prior to the fund''s investment, to ensure the fund''s ESMR is adequate to assess and manage E&S risks.