IFC Recapitalization Fund Investment Requirements

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IFC Recapitalization FundInvestment
Requirements
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Description

• Initial Capital Commitments of US3 billion,
  divided as follows

• Products equity, equity-related instruments and
  subordinated loans
• Investment objectives stabilize vulnerable
  emerging market banking systems while generating
  financial returns with an attractive risk-return
  profile
• Investment strategy long-term capital
  appreciation through non-controlling minority
  stakes in banks
• Target banks banks that have large market shares
  and which need additional capital
• Exit strategy as market conditions improve and
  alternative sources of capital become available
  to portfolio banks, the Fund will seek to sell
  its investments in the public markets or to other
  private investors

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Bank Eligibility Criteria

• Private sector systemic banks
• Minimum 7 market share (in terms of loans)
• Equity Fund (EF)
• Provides equity and equity-related instruments
• Acquire stakes of not less than 10, except for
  banks with market share exceeding 20 where the
  minimum participation would be 5
• Subordinated Debt Fund (SDF)
• Provides US denominated non-convertible
  subordinated loans
• Only invest if EF invests an amount equivalent to
  at least 75 of the SDF investment
• All investments will be subject to IFCs normal
  Social and Environmental Standards
• Up to 15 of the Fund may be invested in
  state-owned banks with a clear path to
  privatization, subject to the other eligibility
  criteria

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Diversification Criteria

• The diversification criteria are as follows

• The Fund will prioritize countries and regions
  where it can have optimal impact, building a
  globally diversified portfolio in Asia, Europe,
  Latin America, Middle East North Africa and
  Sub-Saharan Africa