Washington, D.C., April 18, 2005 –
The International Finance Corporation, the private sector arm of the World Bank Group, has made a $30 million investment in the Santiago CDO fund, which is managed by the Pacific Investment Management Company (PIMCO). The $400 million fund has been established as a collateral debt obligation to target investments in a globally diversified pool of dollar denominated debt issues, including substantial private corporate debt.
The fund is structured to offer investment opportunities to non-institutional investors in emerging markets and to their institutional counterparts, which focus exclusively on investment-grade instruments. At least half of the fund’s underlying asset pool is expected to comprise credits from emerging market companies, including 10 percent of quasi-sovereign issues. The other half will consist of sovereign issues. The fund will target IFC’s traditional client base and seek to achieve a 15 percent share of primary corporate issues from emerging market companies that are at least one notch below their respective sovereign ratings.
"IFC is sending an important market signal in developing innovative instruments for institutional investors who seek long-term exposure in emerging market fixed income. We believe that participation in this asset class by a top-tier fund manager like PIMCO will improve transparency, add buy-side perspective to new issuance, and deepen the investor market," said Haydee Celaya, IFC's director for private equity and investment funds.
PIMCO provides fixed income investment advisory and management services to institutional investors. As of December 31, 2004, it had $446 billion under management, of which about $15 billion were held in emerging markets. With an annualized return of 21.5 percent over the past five years, PIMCO has an excellent track record for its aggregate exposure in emerging market fixed income and has outperformed the Emerging Markets Bond Index Global (EMBI Global) by over 7 percent.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
