MICROCAPITAL BRIEF: Jive, IFC Launch $320m Investment Vehicle to Buy Distressed Assets in Brazil; Freeing Cash for SMEs, Lenders

An entity of Jive Investments, a Brazil-based investment management firm, recently partnered with the International Finance Corporation (IFC), a member of the World Bank Group, to purchase “non-productive assets” in Brazil, increasing liquidity in markets that have been bogged down during the COVID-19 pandemic. Jive Distressed Fund III and IFC will invest USD 240 million and USD 80 million, respectively, in a co-investment vehicle that will buy nonperforming loans from financial institutions and “distressed real estate and legal claims” from small and medium-sized enterprises (SMEs). This will increase liquidity for lenders to grow their portfolios and for SMEs to invest in their core business lines.

“The development of the distressed assets market is a key instrument to increase the credit availability and to reduce distortions in the financial market and to foster economic growth in the country,” says Ariane Di Iorio, IFC’s Chief Investment Officer.

Founded in 2010, Jive Investments is an alternative assets firm dedicated to “originating, acquiring and servicing corporate nonperforming loans, distressed real estate properties, legal claims and other distressed assets.” As of 2020, Jive Investments has 150 employees managing assets valued at BRL 6.0 billion (USD 1.1 billion), including assets whose face value totals BRL 18 billion (USD 3.5 billion).

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2020, it reported total assets of USD 96 billion. During its 2020 fiscal year, IFC invested USD 22 billion in financial institutions and other firms in developing countries.

The World Bank Group is a multilateral organization whose overarching goals are to promote shared prosperity and end extreme poverty by 2030. With 189 member nations as of 2020, the group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2020, the World Bank Group disbursed funds totaling USD 54 billion.

By Romil Pandey, Research Associate

Sources and Additional Resources

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26111

Jive Investments homepage
http://www.jiveinvestments.com/

IFC homepage
https://www.ifc.org/

World Bank Group Annual Report 2020
https://www.worldbank.org/en/about/annual-report

Past MicroCapital brief on IFC
https://www.microcapital.org/microcapital-brief-ifc-ukraine-developing-national-financial-inclusion-strategy-to-expand-financial-access-digital-services-employment-economic-growth/

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