WASHINGTON, D.C., Apr. 25 -- The International Finance Corporation (IFC) has approved equity investments in Pionero Fondo de Inversion Mobiliaria, a Chilean closed-end equity fund, and Moneda Asset Management S.A., the asset management holding company that will launch and manage Pionero.
The first of its kind to be established in the Chilean market, the Pionero Fund will invest in small and medium-sized Chilean companies listed on local stock exchanges. Pionero will be listed on the Santiago Stock Exchange for an initial term of ten years, which may be extended for two additional years.
"Pionero will contribute to capital market development in Chile by giving foreign and domestic institutional investors a chance to invest in second-tier Chilean companies," according to Julio Lastres, Manager of IFC's Latin America and Caribbean Capital Markets Division. "This will increase the liquidity of these companies, enhance their value, and encourage more of them to use local equity markets for their financing needs."
IFC will invest up to US$10 million or up to 25 percent of Pionero's capital and in up to 20 percent of Moneda's share capital. Pionero is the first fund developed by Moneda, which was formed in response to increasing demand for more professional asset management and more specialized investment vehicles in Chile. IFC is supporting Moneda's local sponsors -- Mr. Sergio Undurraga, a local fund manager, and Larrain Vial, a Chilean stock brokerage firm -- in their efforts to establish a company that will offer local and foreign investors specialized services in areas such as equity funds for companies with small market capitalization, equity funds for private (non-listed) companies, and fixed income funds.
This investment is part of IFC's strategy to strengthen local capital markets in Latin America by fostering the development of financial institutions and fund management capabilities. Recent reforms in Chile's capital markets laws have promoted the development of funds similar to Pionero.
IFC is the private sector arm of the World Bank Group and the largest multilateral source of financing for private sector projects in developing countries.
