The Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC)—a member of the IDB Group—have established a private-sector focused partnership with The Abraaj Group (Abraaj), a leading private equity investing firm operating in growth markets. As agreed in a Memorandum of Understanding, signed last week in Washington, D.C. the partners aim specifically to promote private sector development and investment in Latin America and the Caribbean.
“In today’s dynamic business environment, small and medium-sized enterprises (SMEs) need to think and act globally” said IDB President Luis Alberto Moreno. “In partnering with our region’s SMEs, global private equity players such as Abraaj help them to overcome the challenges and harness the opportunities of global competition.”
The IDB, IIC and Abraaj will develop both financing and knowledge products as partnership opportunities, aiming to expand the regional private equity industry. In terms of financing, they will seek to mobilize resources for equity investments in high-growth, medium-sized companies, co-finance initiatives in areas of shared priority, and bring advisory and training services to Abraaj’s portfolio companies across Latin America and the Caribbean.
Carl Muñana, General Manager of the IIC, noted, “The role of equity is critical for meeting the financing demands of the private sector. Equity investments catalyze growth, create jobs and spur innovation across investee companies while attracting further investors to our region. Private equity as an asset class is still in its beginnings in Latin America and the Caribbean but it has enormous potential to impact development.”
The collaboration will feature knowledge-sharing by promoting investment know-how and entrepreneurship through training, conferences, workshops and joint publications, among other activities.
Arif Naqvi, Founder and Group Chief Executive Officer of The Abraaj Group, said: “We are pleased to enter into this Memorandum of Understanding with the IDB and the IIC. Our collaboration is testimony to the importance of combining private and public-sector efforts to spur entrepreneurship and growth in Latin America. With Abraaj’s unique investment approach and the IDB Group’s platform, resources and commitment to further developing the private sector in Latin America, our collaboration will support the investment and growth of Latin American business champions, driving value not only for shareholders but also to wider constituents and stakeholders, ensuring a positive impact on job creation and sustainable socio economic development.”
About the IDB
Established in 1959, the IDB is the leading source of development financing for Latin America and the Caribbean, with a strong commitment to achieve measurable results, increased integrity, transparency and accountability. It has an evolving reform agenda that seeks to increase our development impact in the region.
About the IIC
The IIC, a member of the IDB Group, promotes private sector development in Latin America and the Caribbean with a focus on SMEs. The IIC provides companies with funding in the form of equity investments, loans, and guarantees, as well as technical assistance, advisory services, and innovative knowledge products. In 2014, the IIC approved 64 operations totaling $426.3 million. Since its inception, the IIC has approved more than 920 direct loan and equity investments to SMEs and financial intermediaries, for a total of $5.6 billion. An additional $3.7 billion has been mobilized through cofinancing and syndication agreements.
About The Abraaj Group
The Abraaj Group is a leading private equity investor, purpose-built for operating in the growth markets of Africa, Asia, Latin America, the Middle East, and Turkey. Employing over 300 people, Abraaj has over 25 offices spread across five regions with hubs in Dubai, Istanbul, Mexico City, Nairobi and Singapore. The Group currently manages approximately $9 billion across regional, sector and country-specific Funds. Abraaj has realized nearly $5.1 billion from over 70 full and partial exits, and funds managed by the Group have made over 140 investments in sectors including consumer goods, energy, financials, healthcare and utilities. The Group is committed to the highest environmental, stakeholder engagement and corporate governance standards and is a signatory to the United Nations-backed Principles for Responsible Investment and the United Nations Global Compact. The Abraaj Group is regulated by a number of international regulatory authorities including the DFSA.