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Financial Institutions

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Private Equity and Investment Funds

The International Finance Corporation, the private sector arm of the World Bank Group, has built up a portfolio of investments in emerging market private equity funds representing a commitment of over $3 billion in about 180 funds.

IFC's experience has shown that there is a strong relationship between fund performance and development impact, and that the quality of the fund manager is the main driver of performance. Consequently, IFC's current investment strategy for funds has a strong focus on experienced teams with a proven good track record. It also seeks managers who add commercial value to the companies in which they invest, rather than just supplying capital.

IFC's role typically includes:

• Acting as a catalyst for mobilizing institutional capital;
• Supporting experienced fund managers who can implement value-added strategies;
• Working with fund managers on corporate governance and sustainability at the fund and company levels; and
• Enhancing the transparency and accessibility of emerging market funds to commercial investors.

In recent years, IFC has worked to make emerging market private equity more visible to investors. Initiatives have included creating a benchmark for emerging market private equity, sponsoring the creation of EMPEA (the Emerging Markets Private Equity Association), and holding the Annual Global Private Equity Conference that is now the premier event for investors in the sector.

Since 2001, the Private Equity and Investment Funds Department has been adding value to its portfolio to improve financial returns and have a sustainable impact on emerging markets. This is done through: Leveraging IFC's internal resources and partnerships, organizing value-added exchanges and synergies within the portfolio, developing best practices for the management of emerging market fund of funds and implementing state-of-the art management information systems. The Funds Department has also become IFC's center of expertise for the selection and structuring of new funds, leveraging and sharing the experience gained from its portfolio, and constantly adapting best industry practices to the constraints of the different markets it operates in.

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