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IFC Backs Ashmore I Infrastructure Private Equity Fund

March 11, 2010

IFC will invest up to $20 million equivalent, not exceeding 20% of total commitments, through a $500 million private equity fund focused on Colombian infrastructure.

Infrastructure projects abound in Colombia these days, thanks to a pro-investment climate and dramatic improvements in public safety and access to the country.  So, when news broke last year that the Colombian government was helping to create a private equity fund for infrastructure projects, it was big news, and I wrote about it here. The fund’s $500 million size and its infrastructure purpose made it big news. The fund is dedicated to projects in sanitation, telecommunications, transport, energy, and logistics.

Ashmore Investment and Inverlink were selected to be the managers of the fund. Ashmore and Inverlink were the winners out of five teams who submitted bids. Macquarie Capital is the technical advisor.  Bancoldex (Banco de Comercio Exterior de Colombia) will be a 50% investor in the fund. 

It was also big news that Ashmore I was formed as a private equity fund or Fondo de Capital Privado, FCP. FCP’s are a special kind of private equity fund that are specifically designed to attract institutional investors, mainly pension funds, due to specific safeguards in corporate governance standards, such as investment committees, external managers, and reporting requirements, according to this information from IFC:

The Ashmore I fund’s management and structuring looks to be world-class:

The Ashmore Fund Manager is owned by Ashmore Group plc, Inverlink SA, and Messrs. Pedro Nel Ospina and Mr. Francisco Lozano. Ashmore is a UK-based global private equity group with US$31 billion in assets under management, listed on the London Stock Exchange (ticker: ASHM). Ashmore is known for distressed investing in emerging markets but is also active in infrastructure investing in Latin America through Ashmore Energy International. Inverlink is one of Colombia’s leading investment banks. Messrs. Ospina and Lozano held several senior positions in the Colombian government as well as the private sector, including (for Mr. Ospina) being CEO of Corporación Financiera Colombiana before launching the Fund. The Fund plans to invest in 10 to 15 infrastructure projects in Colombia, in sectors such as transportation, power, oil and gas, water, telecommunications, waste management, and logistics.

The Bogotá-based fund management team is led by Camilo Villaveces, previously at Inverlink, and Messrs. Ospina and Lozano [from the IFC], along with staff from Ashmore and Inverlink who will be seconded to the team. The Fund’s investment and divestment decisions will be made by an Investment Committee, which consists of senior executives from Ashmore and Inverlink. In addition, Macquarie Group, a global investment bank and a leader in infrastructure investing, has been hired as technical advisor.

The IFC did not channel all of its infrastructure allocation to the Ashmore I fund. It is also providing a $50M refurbishment and upgrade of the small container port in the historic city of Santa Marta.  The project will double the size and almost triple the capacity of the port.

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