AlterMed FCPR

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	26123
Company name	AlterMed FCPR
Country	MENA Region
Sector	Collective Investment Vehicles
Environmental category	FI
Department	Private Equity and Investment Funds
Status	Completed

Date SPI disclosed	September 18, 2007
Projected board date	October 18, 2007
Previous Events	Approved: January 4, 2008

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

AlterMed FCPR (Fonds Commun de Placement à Risques à Compartiments), the “Fund”, is a €75 million closed-end private equity fund which will make equity and equity-related investments in small and medium-sized enterprises (SMEs) located in North Africa and Turkey. Target industries will include pharmaceuticals, telecom, construction materials, consumer goods, food processing, plastics, mechanical industries, automotive parts, and logistics. AlterMed is a compartment style fund under French law, with each compartment managed as a separate fund. There are three country compartments (each a separately managed fund under one common legal framework):

- AlterMed Alternative Private Equity Fund (APEF) with a target size of €30 million to invest in Tunisia and opportunistically in Algeria (up to 15%);
- AlterMed Maghreb with a target size of €25 million to invest in Morocco with up to 10% in Algeria; and
- AlterMed Turkey with a target size of €20 million to invest in Turkey. The objective is to provide equity capital to an underserved market segment and thereby assist in the development of 25-35 small and medium sized businesses with high growth potential in the targeted countries.

Anticipated development impact of the project

The project:

- Fills the void in the market for private equity capital and expertise for growth SMEs;

- Assists portfolio companies in their growth and development strategies including opening up markets in Europe through business relationships with Viveris’ network of portfolio companies and financial partners in Europe;

- Adds value to portfolio companies by means of improved corporate governance and international best practices;

- Provides jobs to a growing labor force;

- Builds local institutions and skills;

- Contributes to sustainable economic development by incorporating environmental and social standards.

IFC's expected development contribution

IFC’s commitment will serve in an institution building and catalytic roles providing added credibility to the Manager in new countries of operations. A key component of IFC’s strategy is to support emerging managers, especially those with an SME focus. Viveris’ model of partnering with local teams effectively means creating a series of new managers in the target countries where private equity has long been an underserved market due to the lack of experienced local fund managers. The Fund will target SMEs in the region that IFC would have difficulty in accessing in a cost-efficient manner. IFC’s regional knowledge and expertise will assist the Manager in understanding these new markets and building partnerships. Through its investment in AlterMed and its role on the Advisory Board, IFC will also be able to assist in structuring Fund terms to international standards, impart norms on corporate governance and best practices and contribute its regional expertise and knowledge.

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 if any, 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, if required, the capacity of the fund 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 per format to be provided by IFC.

IFC PROJECTS