IFC, SWFs Partner to Invest in Companies in Africa

The International Finance Corp said it would team up with SWFs and pensions to form an $800 million fund that will invest in equities in Africa, Latin America and the Caribbean.

(April 13, 2010) — The International Finance Corp (IFC), the World Bank’s private-sector lender, announced a new $800 million fund to allow sovereign and pension fund investors to invest in equities in Africa, Latin America and the Caribbean. The fund is part of IFC’s broader strategy to foster growth and jobs in the developing world, mobilizing third-party capital where it is most needed.

“Pension and sovereign funds represent a significant savings pool that is seeking commercial returns and portfolio diversification,” Robert Zoellick, president of the World Bank, said in a statement. “With this fund, we will demonstrate that developing countries have high-quality investment opportunities to attract commercial investors.”

The creation of the new fund, which will be managed by IFC Asset Management Company, comes after Zoellick urged sovereign wealth funds to invest in equity in sub-Saharan Africa. Today, SWFs are believed to control assets worth between $2 trillion to $3 trillion.

The IFC has already committed up to $200 million to the fund, while investors from Saudi Arabia, South Korea, the Netherlands and Azerbaijan have committed up to $600 million, The Wall Street Journal reported. Those investors include Korea Investment Corp., Dutch pension fund manager PGGM, the State Oil Fund of the Republic of Azerbaijan, and a Saudi fund investor.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742