IDB Invest Reignites Growth in Central America, Dominican Republic, Colombia Through New Fund
IDB Invest has invested $10 million in CASEIF IV L.P. (CASEIF IV), a new mezzanine debt and private equity fund managed by LAFISE Investment Management Ltd. (LIM) that will provide mezzanine finance and equity for high-growth potential mid-sized companies in Central America, Panama, the Dominican Republic, as well as in Colombia.
With a target size of $75 million and $450,000 of technical assistance funds, CASEIF IV is expected to be the largest local mezzanine fund focused on mid-sized companies ever raised. By providing incremental access to mezzanine and equity financing options, CASEIF IV is expected to help local companies unlock productivity gains, expand operations, including cross-border expansions, and capitalize on global supply chain integration opportunities. It may also contribute to job creation, and alleviating the effects of both the COVID-19 crisis and recent hurricane storms, as well as help reignite economic growth in Central America in the aftermath of the pandemic.
CASEIF IV, with a five-year investment period, will provide access to a combination of much needed growth funding and technical assistance to around 12 mid-sized companies with an average investment ticket size of $6 million.
IDB Invest’s gender, diversity and inclusion (GDI) advisory services will support LIM to increase its capacity and understanding of GDI best practices and deliver training to CASEIF IV portfolio companies, focused on the value of diversity and 2X Challenge gender equity criteria. IDB Invest will also advise LIM in the application of the Women’s Empowerment Principles gender gap analysis tool (WEP) to the Fund’s investee companies, to create awareness and identify opportunities to improve gender equality in their leadership teams, operations, and product offerings.
IDB Invest will work with LIM to align CASEIF IV with the 2X Challenge to help mobilize private capital to projects that empower women in at least 30% of the investee companies.
In addition, IDB Invest will work with LIM to incorporate industry best practices in integrity matters and their Environmental and Social risk management, by requiring them to implement environmental and social management systems according to IDB Invest’s standards.
This deal is expected to contribute to five United Nations Sustainable Development Goals (SDGs): No poverty (SDG 1), Gender Equality (SDG 5), Decent work and economic growth (SDG 8), Reduced inequalities (SDG 10) and Responsible consumption and production (SDG 12).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About CASEIF IV
CASEIF IV L.P. is a limited partnership formed under the laws of the Province of Ontario, Canada. Despite a challenging fundraising market, the Fund has already been constituted in December 2020 with a first closing of $39 million in commitments. With the proposed IDB Invest investment and other expected institutional and private investors, CASEIF IV is expected to reach more than $75 million in commitments as Fund target size. Other investors with more than 5% stake in CASEIF IV include NORFUND, FMO, IFC of World Bank, SIFEM managed by OBVIAM and LAFISE Group.
LAFISE Investment Management Ltd. (LIM) is a fund managing company resulting from a joint venture between NORFUND and LAFISE Group. LIM was incorporated under the laws of the Bahamas in 2000 and is owned 80 % by LAFISE Group and 20 % by NORFUND. LIM was created to manage CASEIF, a $14 million SME impact fund sponsored by NORFUND and the IDB Lab, the innovation laboratory of the IDB Group. Since then, and now with a track record of more than 20 years, LIM has managed three funds with total assets under management of $84 million and 33 investment executed, of which 24 were already divested. https://www.linkedin.com/showcase/lafise-investment-management/
About IDB Lab
IDB Lab is the innovation laboratory of the IDB Group, the leading source of development finance and know-how for improving lives in Latin America and the Caribbean (LAC). The purpose of IDB Lab is to drive innovation for inclusion in the region, by mobilizing financing, knowledge, and connections to co-create solutions capable of transforming the lives of vulnerable populations affected by economic, social or environmental factors. Since 1993, IDB Lab has approved over $2 billion in projects across 26 countries in LAC. www.bidlab.org