Press Release
Thursday, October 16, 2008
OPIC BOARD APPROVES $350 MILLION FOR THREE INVESTMENT FUNDS FOR LATIN AMERICA
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved $350 million in financing for three new private equity investment funds that will provide much-needed capital to a host of sectors in the economies of Latin America. The funds will have a combined total capitalization of $1.45 billion.
Fundraising for private equity in Latin America for 2007 totaled only $4.4 billion. With over $1.4 billion in potential capital to be raised by the three approved funds, OPIC capital will have an immediate, measurable impact on the availability of developmental capital in the Latin American region.
“In order for the economies of Latin America to take the next step in their development, it is crucial that they have capital available for sectors that drive economic growth. These three new investment funds will provide $1.45 billion in investment to precisely those sectors, throughout Latin America but with an emphasis on Andean and CAFTA-DR countries,” said OPIC President and CEO Robert Mosbacher, Jr. “Industries ranging from energy and infrastructure to services and microfinance will benefit from a significant injection of investment capital as a result of these new OPIC-supported funds. That investment will in turn drive further economic growth throughout the region.”
The OPIC board approved the following funds:
Greylock Latin America Opportunity Fund
OPIC is providing $150 million in financing to the fund, which will invest in debt and hybrid instruments across Latin America, with a primary focus on Colombia, Peru, the Dominican Republic and the countries of the Central America Free Trade Agreement region. The fund will target sectors such as telecommunications, finance, agribusiness, tourism, real estate, natural resources and energy. It may also invest up to 15 percent of its capital in microfinance projects. OPIC selected as fund manager Greylock Capital Management, L.L.C. The fund has a target capitalization of $450 million.
Latin Power and Infrastructure IV Fund
OPIC is providing $150 million in financing to the fund, which will invest in energy and infrastructure projects in Latin America and the Caribbean, particularly those being developed by private entities. Among the projects the fund would consider, in addition to energy, are maritime ports, airports, transport, railroads, toll roads, water, waste management and telecommunications. The fund is expected to invest up to 40 percent of its capital in Peru and up to 25 percent in Colombia, with the remaining investments in Brazil, Chile and Mexico. OPIC selected as fund manager Conduit Capital Partners, L.L.C., which served as manager of the new fund’s predecessor, Latin Power III. The new fund has a target capitalization of $800 million.
Altra Private Equity IV Fund (APEF)
OPIC is providing $50 million in financing to the fund, which will invest in established companies with proven business models operating primarily in the countries of the Andean region. At least 70 percent of the fund’s capital will be invested in Colombia and Peru. Its goal is to provide much-needed capital to mid-market companies in sectors such as services, consumer goods, personal health care and cosmetics, business process outsourcing and biofuels. OPIC selected as fund manager Altra Investments, Inc. The fund has a target capitalization of $200 million.
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 35-year history, OPIC has supported $177 billion worth of investments that have helped developing countries to generate over $13 billion in host-government revenues and create over 800,000 host-country jobs. OPIC projects have also generated $71 billion in U.S. exports and supported more than 271,000 American jobs.