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IFC Announces US$20 Million Investment in Kandeo 3D to Boost Private Sector Growth in Colombia, México and Peru

Bogotá, Colombia, June 1st, 2021. The International Finance Corporation (IFC), a member of the World Bank Group, announced a US$20 million investment in Kandeo 3D, a private debt fund managed by Kandeo Investment Advisors that will provide financing to underserved Middle-Market Enterprises (MMEs) in Colombia, México and Peru to accelerate economic recovery in the region.
 
The investment will allow Kandeo Investment Advisors to provide much-needed financing to MMEs in the context of the COVID-19 pandemic. The objective is to contribute to strengthen the job security and local economic development of these countries. Kandeo 3D aims to have a total capitalization of up to US$150 million.

Elizabeth Martínez de Marcano, Country Manager of IFC in the Andean Region, said: "The productivity of middle size companies is often constrained by limited access to long-term finance. According to the World Bank's Enterprise Surveys database, only 35.4 percent of MME investments are financed by banks in Peru, 44.8 percent in Colombia, and 8.6 percent in Mexico. By promoting a broader access to capital, this investment in Kandeo 3D will allow IFC to tackle the low productivity growth of MMEs that holds back the economy of these countries and fosters informality and financial uncertainty in the region".
 
Eduardo Michelsen-Delgado, Kandeo's CEO, stated: "Strengthening the middle market could boost Latin America's GDP growth by 50 percent, adding $1 trillion in GDP by 2030, according to a report by McKinsey & Co. Limited access to finance is one of the greatest challenges medium-sized companies face when expanding their businesses, to boost dynamic companies that provide well-paying jobs and to increase a growing middle class with spending power".
 
Increasing the productivity of MMEs is key to achieve sustainable growth in Latin America and the Caribbean (LAC). In LAC economies, MMEs are needed to fill the gap between a small number of large companies and a high number of small and often informal enterprises, or what is often referred to as the "missing middle". MMEs are hindered by lack of access to capital. Most firms, even if they have access to credit from traditional commercial banks, are only able to secure short-term loans for working capital, which are not enough to modernize their businesses, boost productivity, and remain competitive in rapidly evolving markets.
 
IFC's support to Kandeo 3D 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.
 
About IFC
IFC—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 Kandeo Investment Advisors
Kandeo is a regional Asset Manager managing Private Capital funds since 2010; founded by seasoned professionals from the Latin American Finance, Private Equity and Consulting industries across Latin America. The Kandeo network includes offices in Colombia, Peru, Mexico and the US, with over 20 full-time investment professionals, including several experienced professionals recently recruited to manage the Private Debt strategy. Over the past decade, the executive team has brought leadership focused on operational excellence and strong Environmental, Social and Corporate Governance (ESG) performance.

The Asset Manager has been part of transactions to date over USD 1 billion throughout its investments. Through all its Portfolio Companies, Kandeo has served more than 500 thousand clients (67.3% female clients), there is a 100% female board member representation and 41% of management positions are filled by women. Kandeo's track record proves it has been making significant strides to fill in the needs of equality and financial inclusion in Mexico, Colombia, and Peru through its investments and business practices.   
 
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