Bogota, Colombia, April 15th, 2021. The International Finance Corporation (IFC), a member of the World Bank Group, announced a US$20 million investment in the HMC Andean Private Debt Fund (HMC), a private debt fund that will provide financing to Middle-Market Enterprises (MMEs) in Colombia, Peru and Chile to accelerate economic recovery in the region. The investment will allow HMC to provide much-needed financing to MMEs in the context of the COVID-19 pandemic. The objective is to contribute to strengthen job security and local economic development on the road to recovery from the health crisis. HMC aims to have a total capitalization of up to US$100 million and will be managed by HMC Capital, a global investment and advisory platform with focus on alternative assets. Elizabeth Martinez de Marcano, manager for the Andean Region of IFC, declared: "The growth in productivity of MMEs is key for achieving sustainable economic growth in Colombia, Peru and Chile. IFC's support to the Fund will help spur the growth of an alternative financing channel for middle-market enterprises, create jobs, enable financial inclusion, and ultimately drive economic diversification in the region We are proud to participate in this effort with HMC."
"With limited capacity of traditional channels to finance underserved segments in LAC, alternative instruments such as fund vehicles can play an important role in providing them with capital. IFC's timely financial assistance will allow us to support MMEs that are not yet ready to raise debt in capital markets, thereby helping them prepare to tap these markets. We are honored to have IFC as an investor in our Fund, supporting the MMEs in the region," said Felipe Held, Co-Founder and CEO at HMC.
Daniel Dancourt, Partner and Head of Credit at HMC Capital, added: "At HMC we are committed to be part of MMEs growth in the Andean Region. Our objective is to give them access to credit and support their businesses in this challenging environment."
The productivity of MMEs is constrained by limited access to long-term finance. In Chile, Colombia, and Peru, only a minority of MME investments are financed by banks. Most MMEs with access to credit from traditional commercial banks only can secure short-term loans for working capital, which are insufficient to meet their long-term investment needs to modernize their businesses and remain competitive in the regional markets.
The COVID-19 pandemic has badly hurt companies of all kinds, but particularly those with smaller operating margins, such as MMEs. Business and liquidity have dried up, jobs have been lost, and entrepreneurs have dramatically curtailed if not closed their businesses—at least temporarily. IFC uses investment and advisory services to support financial intermediaries in reaching out to the MMEs sector more effectively and efficiently. On the investment side, IFC helps to increase businesses' access to financial services by providing funding to institutions that focus on MME lending.
About IFCIFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org. About HMC CapitalHMC Capital is a global alternative investment firm with $14.5 billion in assets under management and advisory from institutional and private investors.Founded in 2009, HMC Capital invests across multiple asset classes and geographies with a focus on Private Equity, Credit, Real Estate and Venture/Growth. HMC Capital operates in 6 countries with a team of 80+ professionals across the United States and Latin America, providing local experience, market know-how, independence and commitment to capture and structure the best investment opportunities worldwide.