The Overseas Private Investment Corporation (OPIC), a United States federal agency, has announced a USD 350 million financing plan towards private equity investments in Latin America. The plan was approved by OPIC’s Board of Directors to finance three approved new funds in order to provide capital across several economic sectors, including microfinance. The private equity funds are the Greylock Latin America Opportunity Fund, the Latin Power and Infrastructure IV Fund, and the Altra Private Equity IV Fund (APEF). The investment will allow these funds to achieve a combined capitalization of USD 1.45 billion.
“In order for the economies of Latin America to take the next step in their development, it is crucial that they have capital available for sectors that drive economic growth…industries ranging from energy and infrastructure to services and microfinance will benefit from a significant injection of investment capital as a result of these new OPIC-supported funds” said OPIC President and CEO Robert Mosbacher, Jr.
At least one of the funds has indicated microfinance as a prioritized sector. Greylock Capital Managements, LLC, a venture capital firm which heads the Latin America Opportunity Fund, stated the possibility of investing up to 15 percent of its capital into microfinance projects within Latin America. Greylock is a New York based firm with USD 1.3 million in annual revenues. The company does not report to the MIX Market database, and there is no information available on its other equity investments. There is also no additional information for the Latin Power and Infrastructure IV Fund or the Altra Private Equity IV Fund.
OPIC was established as a self-sustaining government agency in 1971 by the United States Congress. Its goals are to aid American business investments overseas and to promote economic development in emerging markets. The agency does this by managing risks associated with foreign direct investment for the private sector while supporting American foreign policy. Since its inception, OPIC has supported USD 177 billion worth of investments in developing countries to generate over USD 13 billion in host-government revenues and create over 800,000 host-country jobs. OPIC projects have also generated USD 71 billion in U.S. exports and supported more than 271,000 American jobs.
As of the end of 2007, OPIC has provided USD 250 million in financing to 31 microfinance projects around the world. Some examples of these are a USD 10 million guaranty facility to Calvert Social Investment Foundation towards expanding the sale of its Notes through Microplace, a microfinance-focused Ebay subsidiary; and a USD 4.4 million loan in 2006 to help capitalize Global Partnership’s investment vehicle. The Seattle-based nonprofit organization used the USD 8.5 million fund to make loans to 14 MFIs across Latin America.
By Yrenilsa Lopez, Research Assistant
ADDITIONAL SOURCES
Hoover’s Profile: Greylock Capital Management, LLC (subscription only)
Overseas Private Investment Corporation: Annual Report 2007
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