SEAF Establishes 1st Diversified PE Fund In Colombia

01/15/2006

Author:
Small Enterprise Assistance Funds
Bogotá, Colombia
www.seaf.com

Categories:
Venture Capital
SME Finance

Preview:
Small Enterprise Assistance Funds (SEAF) is pleased to announce the first closing of the Fondo Transandino Colombia FCP (the “Fund”), a private equity fund focusing on small and medium enterprises (SMEs) in Colombia, at US$ 16 million. Investors in the Fund include a mix of international agencies and Colombian institutional investors: the US Agency for International Development, the Swiss Investment Fund for Emerging Markets, and the Belgium Investment Company for Developing Countries; on the local side, three Colombian pension funds and one insurance company are participating in the fund. SEAF expects additional closings during the next six months at around US$10 million.

Article:
Small Enterprise Assistance Funds establishes first diversified private equity fund in Colombia

January 15, 2006 -- Small Enterprise Assistance Funds (SEAF) is pleased to announce the first closing of the Fondo Transandino Colombia FCP (the “Fund”), a private equity fund focusing on small and medium enterprises (SMEs) in Colombia, at US$ 16 million.

Investors in the Fund include a mix of international agencies and Colombian institutional investors: the US Agency for International Development, the Swiss Investment Fund for Emerging Markets, and the Belgium Investment Company for Developing Countries; on the local side, three Colombian pension funds and one insurance company are participating in the fund. While the Fund was initially capitalized at US$ 16 million in December, SEAF expects additional closings during the next six months at around US$10 million from other local and international institutional investors.

The Fund seeks to achieve long-term capital growth by making direct equity and equity-related minority investments, ranging from US$1 to 3 million, in growth-orientated enterprises in Colombia. All major sectors of the economy will be considered, with particular focus on food processing, consumer goods, services, light manufacturing, and retail. As with other SEAF-managed funds, SEAF will seek to enhance the business performance of the Fund’s investments by actively assisting portfolio companies in improving management practices, financial controls, and corporate governance, while providing advice on strategic, operational, and financial issues.

The Fund was structured as a private equity fund regulated by the Colombian Financial Superintendent (Superfinanciera). The Fund is managed by SEAF Colombia S.A, a subsidiary of SEAF also regulated by Superfinanciera. Its management has ample experience with private equity in Latin America, complemented by an investment committee made up in its majority of highly regarded Colombian businessmen. SEAF Colombia, along with USAID, played an active role in modifying a host of local regulations to allow for a proper vehicle for local institutional investors to participate in private equity.

The Fund was established at a crucial time in Colombia’s economy. The country is experiencing unprecedented levels of improved security combined with strong economic growth. SEAF believes that the Fund is in a unique position to capitalize on the substantial number of SMEs and professional entrepreneurs in the country. There are close to 4,300 companies in Colombia with revenues between US$ 1 million and US$ 15 million, growing on average at 9.5% annually over the last two years in terms of sales, significantly higher than the larger companies.

ABOUT SEAF:

SEAF is a global investment firm focused on providing growth capital and operational support to businesses in emerging markets and those underserved by traditional sources of capital. Headquartered in Washington, DC SEAF manages more than US$ 300 million in more than 20 countries around the world through an international network of 15 offices in Central and Eastern Europe, Asia and Latin America managing emerging market funds. Over more than 15 years of operations in private equity investing in emerging markets, SEAF funds have invested in more than 230 SMEs worldwide. Investors in SEAF funds include a cross section of public and private institutions, including international finance institutions, local pension funds, insurance companies and banks.