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| Zephyr Peacock India Fund II, L.P. |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 27466 |
| Company name | Zephyr Peacock India Fund II Limited |
| Country | India |
| Sector | Collective Investment Vehicles |
| Environmental category | FI |
| Department | Private Equity and Investment Funds |
| Status | Pending Disbursement |
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| Date SPI disclosed | April 3, 2009 |
| Projected board date | May 29, 2009 |
| Previous Events | Signed: September 30, 2009
Approved: September 23, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| Zephyr Peacock India Fund II, L.P. (also “ZP II” or the “Fund”) is an India-dedicated private equity fund which is seeking to raise US$75 million to make equity and equity-related investments in growth capital opportunities in high-growth small and medium enterprise (“SMEs”), including those located outside the main Indian metros—a relatively underserved segment of the market. |
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| Project sponsor and major shareholders of project company |
| Zephyr Management, LP (“Zephyr”), the parent company of the Manager, is a global private equity firm headquartered in New York. Zephyr specializes in establishing private equity funds in emerging markets around the world. IFC has invested in earlier Zephyr funds in the LAC and Africa regions. |
| Total project cost and amount and nature of IFC's investment |
| Zephyr Peacock India Fund II has a target fund size of $75 million. IFC is proposing an equity investment of the lesser of $15 million or 20% of the Fund’s total committed capital. |
| Location of project and description of site |
| The Fund is a Cayman Islands exempted limited partnership, and will operate primarily through one or more subsidiaries formed in the Republic of Mauritius, which will acquire, own and operate the portfolio of investments. The Fund Manager is based in Bangalore, India and New York, USA. |
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| Anticipated development impact of the project |
An IFC investment in ZP II is expected to deliver the following development impact:
Stimulate private sector growth – ZP II is expected to expand access to financing by private enterprises, especially SMEs in Tier II, Tier III cities and rural India.
Stimulate job creation – ZP II is expected to provide much needed value-enhancing management and operations advice to high growth companies, which are expected to generate above-average rates of job creation.
Improve governance and build local institution – the Fund is expected to help portfolio companies adopt better practices in corporate governance, environmental and social standards, leading to improved sustainability. |
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| IFC's expected development contribution |
IFC’s expected development contribution includes:
Capital mobilization – IFC’s commitment will help an emerging manager attract capital and reach a critical fund size.
Governance oversight – IFC expects to have a seat on the Fund’s Advisory Committee and to play an active role in ensuring that ZP II adopts best practice fund management and governance. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the fund’s expected portfolio and sectors of investment and determine the Applicable Performance Requirements that would include a combination of:
- The IFC FI Exclusion List and/or The applicable National Social and Environmental Laws and regulations and/or· The IFC Performance Standards
IFC will also review the capacity of the fund manager to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required.
The fund manager will be required to:
· Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC
· Identify responsible, qualified persons to manage and implement the SEMS
· Commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Performance Requirements
· Submit a periodic report to IFC as per a format to be provided by IFC
IFC will review the implementation and performance of the Fund’s SEMS for the first few projects, prior to the Fund’s investment, to ensure that the Fund’s SEMS is robust. For all Category A subprojects the Fund will need to satisfy IFC that the subprojects are in compliance with the Performance Standards or have a satisfactory action plan to bring the subprojects in to compliance within a reasonable time frame prior to investing. |
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| For inquiries about the project, contact: |
Mr. Brian Kim
Zephyr Management, L.P.
320 Park Avenue, 28th Floor
New York, NY 10022
+1-212-508-9438 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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