An Opportunity for Fund Managers

Photo: Supervisor at Congo Call Center, an investee of the Central Africa SME Fund

IFC is seeking experienced investment managers to launch Small and Medium Sized Enterprise (SME) funds in fragile states and frontier markets, as part of an expansion of the SME Ventures Program. IFC’s strategic priority is to drive economic growth and job creation in areas where it is most neededparticularly in fragile and conflict-affected countriesand the funds present an opportunity to catalyze growth in the SME segment. The SME Ventures model combines risk capital for SMEs with technical assistance to both SMEs and investment management teams.

 

Scope

 

Selected fund managers will invest in risk capital in small and medium enterprises across all sectors in specific geographies covered by the program. It is expected that each fund would provide risk capital through investments, as well as technical assistance to the businesses. Given the focus on a new asset class and challenging target countries, it is anticipated that new models of fund management and portfolio company support will be developed. Prospective fund managers are encouraged to provide innovative approaches to fund structuring, fund management, and assistance provision to portfolio companies.

 

Subject to agreed investment objectives and customary terms and conditions, investment managers will be responsible for (a) identifying potentially suitable investments and helping potential investees to develop proposals; (b) processing investments (c) managing their portfolio; (d) mentoring investees; (e) raising or assisting IFC in raising additional funds from other likeminded investors; (f) helping to apply/directing advisory services; (g) managing exits from investees; (h) reporting to IFC on investment and performance against financial and development targets; (i) maintaining robust accounting systems satisfactory to IFC; (j) ensuring systems are in place for environmental and social policy standards, legal compliance and risk management including anti-money laundering/combating financing of terrorism (AML/CFT), all satisfactory to IFC; and (k) identifying and sharing lessons learned.

 

Investment Manager Criteria

 

The criteria that IFC will consider in selecting one or more fund managers for possible financing are expected to include the following:

  • Credibility, consistency, and clarity of the investment manager’s investment strategy;
  • Track record of the fund manager in making private investments;
  • Experience, credibility, and team cohesiveness of the fund manager;
  • Local capability and ability to source necessary local resources;
  • Detailed understanding of the local markets and local regulatory environment;
  • Innovative and feasible strategies for providing pre- and post-investment technical assistance to portfolio companies.

 

Proposals using innovative financial structures and/or partnerships that support with deal origination and/or provide technical assistance to build capacity within investee companies are encouraged. Gender-diverse fund management teams are particularly encouraged to apply.

 

Fund Size and IFC Support

 

IFC would invest in selected funds at first closing. IFC expects each fund to attract the interest of other investors based on IFC’s participation and would prefer to be one of a number of Limited Partners in each SME Ventures fund. IFC will also provide funding and guidance to support the delivery of advisory services to SMEs. Where needed, IFC may also provide grants to assist the fund manager in terms of office space and logistics.

 

Next Steps

 

To apply for the program, please submit an expression of interest by completing all the information requested in this form. You may submit this in the form of a PowerPoint presentation, MS Word-compatible concept note, or another version of your choice. IFC will respond to all applicants who have provided a full response to the questions on the form.

 

We request that you return it by email to SME-V@ifc.org; however, you may alternatively submit it by post at the address provided on the form.

 

Please note: requests for funding from SMEs will not be answered, and should be directed to one of the fund managers on the SME Ventures Program page.