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| VenturEast Life Fund III LLC |
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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 | 27732 |
| Company name | VenturEast Life Fund III LLC |
| Country | India |
| Sector | Collective Investment Vehicles |
| Environmental category | FI |
| Department | Private Equity and Investment Funds |
| Status | Pend FAP |
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| Date SPI disclosed | April 22, 2009 |
| Projected board date | June 30, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| VenturEast Life Fund III LLC (also “VenturLife” or the “Fund”) is an India-dedicated fund that will make equity, equity-related and mezzanine investments towards expansion capital in high-growth small and medium enterprises including those located outside the main Indian metros, in the healthcare delivery and pharma related; food and agriculture related; and clean environment related sectors targeting or leveraging India. Specifically, the Fund will focus on filling unmet needs in these sectors, through financial and other support of private companies with an innovative/profitable business model. The Fund’s specialized focus on these particular segments lead by the Fund Management team with significant past experience in this space, is expected to aid and improve the scalability, operational efficiency and strategic and business development initiatives of investee companies. |
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| Project sponsor and major shareholders of project company |
| The Fund will be managed by VenturEast Mauritius Investment Advisors, with APIDC Venture Capital Private Limited, India (together referred as “Manager” or “VenturEast”), acting as Investment Advisor. The Fund expects to raise both Indian capital raised in parallel into a separate Indian entity, and offshore capital into a Mauritius entity. APIDC Venture Capital is a local Indian private equity manager in operation since 1997 and currently manages over $160 million across its family of funds. |
| Total project cost and amount and nature of IFC's investment |
| The project is a proposed IFC equity investment of up to 20% of the committed capital of the Fund. |
| Location of project and description of site |
| VenturEast Life Fund III LLC is a Mauritius limited life company seeking to invest in India related business. Accordingly, the Manager will seek investment opportunities in India and APIDC Venture Capital will provide services from its office in Hyderabad, India. |
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| Anticipated development impact of the project |
As a result of its focus on value-added investing in the life sciences sector in small and medium enterprises (SME), the Fund is expected to have strong development impact. The Fund manager’s strategy is to take an active role in the management of investee companies through board participation, including making improvements in corporate governance, strategy setting, professionalizing management and improving financial and operational performance. Specifically, the Fund will:
- invest in growth companies that will create new jobs
- promote the continuing development of the SME and mid-cap segment in the private equity market in India, in the health sciences sector, which up to now has attracted a fraction of the total available private equity funding in India
- provide equity financing to small and medium companies with capacity to improve economic development and the - provision of necessary goods and services across India, especially in Tier II and Tier III cities where the Fund
- expects significant geographic coverage |
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| IFC's expected development contribution |
IFC’s investment in VenturLife will:
- support an existing client raise a follow-on fund and achieve a first closing
- bring equity capital and management advice to the underserved SME and mid-market segment in the life sciences sector
- stimulate economic activity and employment growth including outside the main Indian metros and,
- achieve good standards of governance and E&S systems. |
| 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 analyzed the fund’s expected portfolio and sectors of investment and determined the Applicable Performance Requirements which will include:
- The IFC FI Exclusion List and
- The applicable National Social and Environmental Laws and regulations and
- The IFC Performance Standards
As an existing IFC client, VenturEast has developed a Social & Environmental Management System (SEMS) to screen investments. A recent IFC review identified supplemental actions necessary to enhance VenturEast's SEMS to screen against the IFC Performance Standards.
VenturEast will be required to:
- Upgrade its existing SEMS prior to commitment to the satisfaction of IFC
- Continue to ensure responsible, qualified persons are appointed 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
For all Category A subprojects, VenturEast 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.
Additionally, 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. |
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| For inquiries about the project, contact: |
Mr Sarath Naru / Mr Ramesh Alur
Managing Partner
20B ASCI College Park, Road # 3, Banjara Hills
Hyderabad 500 034, India
Ph: +91 40 2355 0481
Fax: +91 40 2355 0487 |
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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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