Presentation on theme: "IFC Asset Management Company Creating Opportunities in Emerging Markets May 2010 This presentation is solely for the use of the client institution and."— Presentation transcript:
1 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 IFC Asset Management Company, LLC IFC’s Business MixIFC’s business consists of three complementary ‘pillars’ that support its mandate and strategic prioritiesInvestment ServicesAdvisory ServicesIFC Asset Management Company, LLCLoans and intermediary servicesEquity and quasi-equitySyndicationsStructured and securitized productsRisk management productsTrade financeSubnational financeTreasury operationsAccess to financeCorporate adviceEnvironmental and social sustainabilityInfrastructure adviceInvestment ClimateInvests third-party capital in a private equity fund formatEnables outside investors to participate in IFCs transaction pipelineLeverages IFC’s expertise and track-record in achieving strong equity returns as well as development impact
3 IFC Asset Management Company AMC Board(Chaired by L. Thunell)Gavin WilsonCEOGeorge SpringsteenLegalMarcos BrujisCap FundHaydee CelayaFund RaisingRuth Horowitz CAOSujoy BoseFund IIViktor KatsNew ProductsJerry TruzzolinoControllerAfrica Fund*(US$200M)Equity Fund(US$1.275Bn)Sub-Debt Fund(US$1.725Bn)African, Latin American and Caribbean Fund(US$1Bn)
5 IFC Equity Track Record 1999 - 2009 IFC surpasses benchmarks in the aggregate and across most sectorsIFC’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 IFC Equity Track Record 2004 - 2009 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 IFC’s Approach to Equity Investments IFC own account investments are typically limited to 25% of the total capitalization of the company or the projectIFC equity ownership is typically limited to 20%IFC does not operate companiesIFC invest as a minority shareholder and structures investments with exit options, convertibles etc. to ensure a realistic exit mechanismIFC 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 sponsorsIFC has a long-term investment horizon that looks beyond short- term market volatilityIFC offers a full range of financial products across the capital structure to support investee companies through all business cycles and foster long term relationships
8 IFC’s Value Added for Equity Investments Focus on financial returns and developmental impactDeep understanding of regulatory reform, including collaboration with the World BankSocially responsible investments subject to industry leading Environmental & Social StandardsIn-house technical expertiseMinority investorCounter-cyclical investment strategyAbility to provide debt financing and in-house technical assistanceOwn financing is usually limited to 25% of company capitalizationUnsurpassed emerging markets knowledge and 54 year track record of successFocus on exit
9 Capitalization Funds Fund Size & Investors Term & Returns Global Fund: US$3 billion consisting of Equity & Sub-Debt FundsAfrica Fund: US$200 million parallel fund targeted to close in May 2010Russia Fund: Up to US$1.5 billion new fund still in concept phaseTerm & Returns8-10 years; 3 year investment periodTargeted IRR per IFC benchmarks in the financial sectorInvestment CriteriaThe Capitalization Funds invest exclusively in commercial banksGlobal Fund invests only in systemic banks, defined by loan market shareAfrica Fund and future funds will be able to invest in all banksInvestment SizeThe 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 volumesInvestment ProcessAll 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 Africa/LAC Fund Investment Criteria Fund Size & InvestorsSize: 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.Term & Returns10 years; 5 year investment periodTargeted IRR per IFC benchmarks in the two regionsRegions & SectorsSub Saharan AfricaThe Fund invests across all IFC SectorsLatin America& CaribbeanInvestment ProcessThe 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.