|
|  |
| VenturEast Proactive Fund |
|
| 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 | 25576 |
| Company name | VenturEast Proactive Fund |
| Country | India |
| Sector | Collective Investment Vehicles |
| Environmental category | FI |
| Department | Private Equity and Investment Funds |
| Status | Active |
|
| Date SPI disclosed | February 12, 2007 |
| Projected board date | March 14, 2007 |
| Previous Events | Invested: November 14, 2007
Signed: October 15, 2007
Approved: October 11, 2007 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposal is to make an equity investment of up to $15 million, not to exceed 15% of total commitments in VenturEast Proactive Fund (the Fund). The Fund, with a target size of $100 million, will invest in equity and equity-linked minority stakes in early-stage small and medium enterprises (SME) in India. Its target industries will include enterprise solutions, consumer internet, global IT products and Research & Development (R&D) outsourcing. The Fund’s objective is to achieve superior long-term capital appreciation with a target net IRR of 30% in local currency for onshore investors and a U.S. Dollar net IRR of 20% for offshore investors. This will be achieved through pro-active involvement in the structuring and management of investee companies to enhance their value. The Fund will be managed by VenturEast Fund Advisors (the Manager), a legal entity established by APIDC Venture Capital Limited (APIDC VC), a fund management company. |
|
| Project sponsor and major shareholders of project company |
- APIDC VC:
APIDC VC is a joint venture between Dynam Ventureast Private Ltd with a 51% stake and APIDC (Andhra Pradesh Industrial Development Corporation Limited) with the remaining 49%.
- The Manager:
The core team of the VenturEast Fund Advisors consists of Mssrs. Sarath Naru, Raghu Mendu, and Siddharta Das, the shareholders of Dynam Ventureast Private Ltd. Mr.Naru has experience as an entrepreneur as well as in the corporate world. Mr. Mendu, has extensive experience in start ups and Mr. Das in venture capital and research/development. |
| Total project cost and amount and nature of IFC's investment |
| The total fund size is $100 million. IFC is proposing an equity investment of $15 million, not to exceed 15% of total commitment of the fund. |
| Location of project and description of site |
| The Fund will invest in the SME sector in India with a focus on information, communication and technology. The Manager of the Fund is located in Hyderabad, India. The Fund is a Mauritius legal entity which will invest in the United Domestic Fund, a fund structured under the Indian Trust Act. |
|
| Anticipated development impact of the project |
The project is expected to impact development in the following areas:
- Generating employment:
By being actively involved in the growth of the investee companies, the Manager will channel the fund towards the creation of new jobs, the preservation of existing jobs and to the development of increased labor productivity.
- Developing the private sector:
The Fund will invest in sustainable companies in the private sector and lead to further development of the private sector in the technology, communication and information space.
- Supporting SMEs:
The Fund has a mandate to invest in small to medium sized businesses and generate revenue from the value addition they provide to these companies. |
| IFC's expected development contribution |
The IFC will contribute on:
- Fund structuring:
IFC’s expertise in fund structuring will help the Manager structure the Fund along international best practice, focusing in particular on governance and fund economics to better align interests of the Manager with investors.
- Catalytic role:
IFC will add credibility to the Manager and increase its chances of broadening the present small investor base by raising capital from international institutional investors.
- Co-investment opportunities:
IFC’s participation in the Fund may allow the Fund to support a greater range of companies through co-investments expanding the capital effectively available to the Fund.
- Governance of the Fund:
IFC will play a lead role through active participation in the Fund’s governance structure and will seek representation on its Board and Advisory Committee
- Institution-Building:
IFC will support the development of local private equity by helping a successful local private equity team grow and expand according to international norms and practices. IFC will also be involved in setting reporting standards at the Fund. |
| 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 Requirements if any, that would include a combination of:
- The IFC FI Exclusion List; and/or
- The applicable National Environmental and Social 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 and Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required.
The Manager will be required to:
- Develop 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 Requirements.
- Take action to remedy any gaps in SEMS implementation on an ongoing basis.
- Submit a periodic report to IFC as per a format to be provided by IFC. |
|
| For inquiries about the project, contact: |
VenturEast Proactive Fund LLC
20B ASCI College Park,
Road #3, Banjara Hills,
Hyderabad, 500034, A.P., India |
|
| 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 |
|
|
|
|