International Finance Corporation has agreed to invest US$26m in L Catterton Latin America Fund III. The fund will target small to mid-sized companies focused in the consumer sector in Latin America. Of the US$26m invested by IFC, US$1m was provided by the Women Entrepreneurs Finance Initiative (We-Fi), a partnership between 14 countries and multilateral banks that seeks to unlock financing for women entrepreneurs.
(Press Release) IFC, a member of the World Bank Group, is investing US$26 million in private equity fund, L Catterton Latin America III (LCLA III) which will provide capital for mid-sized companies focused on the consumer sector in Latin America. The fund will help spur job creation, increase market productivity, as well as support women entrepreneurship in the region. LCLA III is managed by L Catterton, a global fund manager, and has a mandate to invest in Latin America, with specific focus on Brazil, Colombia and Mexico.
The Latin America region is trailing other emerging markets on gender diversity in private equity with only 5 percent of investee companies led by women, which is lower than the meager 7 percent across all emerging markets, according to a recent IFC report. The fund is expected to help contribute to closing the gender finance gap as many consumer companies in Latin America are led by women entrepreneurs. L Catterton has set a target of investing 20 percent in companies owned or operated by women.
“Lack of access to private equity funding is a key barrier for the growth of women-led companies,” said Georgina Baker, IFC Regional Vice President for Latin America and the Caribbean and Europe and Central Asia. “Supporting women-led business in Latin America will encourage others to see the credible business case that exists for greater gender diversity in private equity,” she said.
The fund has already completed its first transaction in a dental company in Brazil that provides affordable services to lower middle socio-economic class, and the business is expected to grow exponentially in the next five years.
The investment in LCLA III is US$25 million from IFC and US$1 million financing from the Women Entrepreneurs Finance Initiative (We-Fi), which is a partnership between 14 countries and multilateral banks that seeks to unlock financing for women entrepreneurs.
By providing capital to private equity and venture capital, IFC can play a critical role in development, helping to build the dynamic, job-creating companies that drive prosperity, provide essential goods and services, and strengthen the middle class. In FY20 so far, IFC has invested a total of $90 million in private equity and venture capital funds to support businesses in Latin America.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
About We-Fi
The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership among fourteen governments and eight multilateral development banks. Housed in the World Bank Group, We-Fi seeks to unlock billions of dollars in financing to tackle the full range of barriers facing women entrepreneurs—increasing access to finance, markets, technology, and mentoring, while strengthening policy, and legal and regulatory frameworks. As one of the We-Fi implementing partners, IFC supports private sector clients with investments and advisory services to expand financial services and market access for women-owned/led firms, as well as increasing the capacity of women entrepreneurs to run high-growth businesses. For more information, visit www.we-fi.org.