Presentation on theme: "Asset Management Company IFC Asset Management Company Creating Opportunities in Emerging Markets May 2010 This presentation is solely for the use of the."— Presentation transcript:
Asset Management Company IFC Asset Management Company Creating Opportunities in Emerging Markets May 2010 This presentation is solely for the use of the client institution and shall be held in strict confidence. This presentation may be distributed only to the client institution's directors, officers and employees on a need-to-know basis, and only for the purpose of evaluating the transaction. No part of this presentation may be circulated, quoted, or reproduced for distribution outside the client's organization without prior written approval from IFC Asset Management Company, LLC.
2 Asset Management Company IFC’s Business Mix Investment Services Advisory Services IFC Asset Management Company, LLC Loans and intermediary services Equity and quasi-equity Syndications Structured and securitized products Risk management products Trade finance Subnational finance Treasury operations Access to finance Corporate advice Environmental and social sustainability Infrastructure advice Investment Climate Invests third-party capital in a private equity fund format Enables outside investors to participate in IFCs transaction pipeline Leverages IFC’s expertise and track-record in achieving strong equity returns as well as development impact IFC’s business consists of three complementary ‘pillars’ that support its mandate and strategic priorities
3 Asset Management Company IFC Asset Management Company AMC Board (Chaired by L. Thunell) Gavin Wilson CEO Marcos Brujis Cap Fund Ruth Horowitz CAO Sujoy Bose Fund II Jerry Truzzolino Controller Equity Fund (US$1.275Bn) Sub-Debt Fund (US$1.725Bn) Africa Fund* (US$200M) African, Latin American and Caribbean Fund (US$1Bn) Haydee Celaya Fund Raising Viktor Kats New Products George Springsteen Legal
4 Asset Management Company IFC’s Global Footprint 100+ offices worldwide
5 Asset Management Company IFC Equity Track Record IFC surpasses benchmarks in the aggregate and across most sectors IFC’s aggregate equity portfolio achieved an average annual before-expenses alpha of 11.0% in the last 10 years (annual return of 24.8% vs. 13.8% for the MSCI EM global index) Note: Returns calculated as quarterly arithmetic mean return multiplied by four.
6 Asset Management Company IFC Equity Track Record IFC’s performance has even been better in the last 5 years, with an average alpha of 16% (annual return of 35.5% vs. 19.5% ) Note: (i) Returns calculated as quarterly arithmetic mean return multiplied by four.
7 Asset Management Company IFC own account investments are typically limited to 25% of the total capitalization of the company or the project IFC equity ownership is typically limited to 20% IFC does not operate companies IFC invest as a minority shareholder and structures investments with exit options, convertibles etc. to ensure a realistic exit mechanism IFC has been able to achieve significant returns (e.g. telecom and banking) by seizing early market opportunities in emerging markets and partnering with the right sponsors IFC has a long-term investment horizon that looks beyond short- term market volatility IFC offers a full range of financial products across the capital structure to support investee companies through all business cycles and foster long term relationships IFC’s Approach to Equity Investments
8 Asset Management Company IFC’s Value Added for Equity Investments Focus on financial returns and developmental impact Deep understanding of regulatory reform, including collaboration with the World Bank Socially responsible investments subject to industry leading Environmental & Social Standards In-house technical expertise Minority investor Counter-cyclical investment strategy Ability to provide debt financing and in-house technical assistance Own financing is usually limited to 25% of company capitalization Unsurpassed emerging markets knowledge and 54 year track record of success Focus on exit
9 Asset Management Company Capitalization Funds Fund Size & Investors Investment Criteria Global Fund: US$3 billion consisting of Equity & Sub-Debt Funds Africa Fund: US$200 million parallel fund targeted to close in May 2010 Russia Fund: Up to US$1.5 billion new fund still in concept phase The Capitalization Funds invest exclusively in commercial banks Global Fund invests only in systemic banks, defined by loan market share Africa Fund and future funds will be able to invest in all banks Term & Returns 8-10 years; 3 year investment period Targeted IRR per IFC benchmarks in the financial sector Investment Size The Capitalization Funds can invest up to US$300 million in any given institution and allow IFC to partner with systemically important banks where, prior to the creation of the Funds, headroom/credit constraints would have reduced volumes Investment Process All investments will be processed by IFC. The Fund will leverage IFC’s banking expertise and rely on IFC’s technical & market analysis, environmental & social, corporate governance, and integrity due-diligence as inputs for its own analysis. The Fund most often invests directly given IFC’s large participation (US$1Bn) in the Global Fund. In certain circumstances, the Fund will co-invest alongside IFC.
10 Asset Management Company Africa/LAC Fund Investment Criteria Fund Size & Investors Regions & Sectors Size: US$1 billion ($800 million committed to date) World-class Investors: a Dutch pension fund manager; Korean, Azeri and Saudi sovereign wealth funds; and IFC. The Fund invests across all IFC Sectors Sub Saharan Africa Latin America & Caribbean Term & Returns 10 years; 5 year investment period Targeted IRR per IFC benchmarks in the two regions Investment Process The Fund is a co-investment fund that will have the option to invest alongside IFC in each equity investment above US$10 million in LAC and CAF. IFC has agreed to offer 25% of all equity investments >US$10 million in LAC and CAF. All investments will be processed by IFC. The Fund will leverage IFC’s sector knowledge and rely on IFC’s technical & market analysis, environmental & social, corporate governance, and integrity due-diligence as inputs for its own analysis. The Fund will co-invest on similar terms with IFC. IFC and the Fund likely will have separate legal documents due to the potential need for independent exits -- the Fund has a 10 year life whilst IFC can be an evergreen investor.