Sao Paulo, Brazil, January 28, 2013
—IFC, a member of the World Bank Group, invested BRL 60 million, approximately $29 million, in Gávea Crédito Estruturado FIDC (Gávea FIDC), a Brazilian fund established to provide long-term debt financing and advice to viable private entities that lack access to traditional funding sources.
The investment will not only expand access to finance for funding-constrained companies and support jobs, it will also help promote capital markets development in Brazil. Gávea Credito Estruturado Gestão de Investimentos Ltda. (“Gávea Crédito Estruturado”), the fund manager, has created an innovative capital markets vehicle to access funds from institutional investors such as pension funds, insurance companies, and asset management firms.
This will help address the deficiency of long-term lending from private sector entities in Brazil, which exposes many strong companies to refinancing risks and reduces their efficiency and competitiveness. Currently, almost 40 percent of all lending to companies in Brazil is provided by BNDES, the state-owned development bank, while the remaining 60 percent is provided by commercial banks mainly on a short-term basis.
“We are honored to receive an investment from IFC in our structured credit fund," said José Berenguer, CEO and CIO of Gávea Crédito Estruturado. "The IFC investment will support our focus on developing and enhancing governance of Brazilian middle-market companies and facilitate their access to long-term funding from both Brazilian and international capital markets. It will also allow us to maximize the positive social, economic, and environmental impacts of these companies, which have driven Brazilian economic growth in recent years and will contribute even more in the future."
IFC's investment in senior, mezzanine subordinated, and junior subordinated quotas of Gávea FIDC will be accompanied by support for stronger environmental and social standards and financial practices. This will make the fund more sustainability and set a broader example for Brazil’s private sector.
“We are very pleased to partner with Gávea Crédito Estruturado to help address an important gap in the local capital markets,” said Paolo M. Martelli, IFC's Regional Industry Director for the financial sector in Africa, Latin America and the Caribbean. “Their new debt fund is an innovative financing vehicle that will create a longer debt yield curve in Brasil and will demonstrate the potential of investing in funds like it in the country and elsewhere in Latin America."
The investment is consistent with IFC’s strategy in Brazil to position viable companies to grow and promote access to long-term credit for the private sector. IFC’s strategy also emphasizes improving the country’s overall competitiveness, supporting job creation, and disseminating durable environmental and social standards.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
.
About Gávea
Based in Rio de Janeiro, the Gávea Group is one of Brazil’s leading alternative asset management organizations. With approximately $6.6 billion of assets under management, Gávea offers its clients a broad range of investment products, including hedge funds, private equity, structured credit funds, real estate funds and longer-term investments. Gávea invests across both emerging and broader international markets, with a macroeconomic, research-intensive investment process. With offices in Rio de Janeiro and São Paulo, Gávea has over 150 employees. Gávea Credito Estruturado was founded in May 2012, focusing on structured credit products.
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