Regional: REG: AIF CAPITAL ASIA III

Nonsovereign Project | 39924-014

Summary

ADB committed to make an equity investment of up to US$30 million in AIF Capital III, LP not to exceed a 25% stake, or result in ADB being the largest investor in the Fund. The Fund's manager is AIF Capital Limited, one of Asia's largest independent private equity firms, overseeing $1 billion in capital. Based in Hong Kong PRC, it has over ten years of private equity investing experience in Asia.

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Project Name REG: AIF CAPITAL ASIA III
Project Number 39924-014
Borrower/Company AIF CAPITAL ASIA III, LP
Country Regional
Location Hong Kong, PRC, India, Indonesia, Thailand
Approval Number 7230
Type or Modality of Assistance
7230 Investment Fund-Equity Investment-LP USD 30.00 million Committed
Strategic Agendas
Drivers of Change
Sector / Subsector Finance - Infrastructure finance and investment funds
Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Catherine C. Pacifico
Project Sponsor(s)
Description ADB committed to make an equity investment of up to US$30 million in AIF Capital III, LP not to exceed a 25% stake, or result in ADB being the largest investor in the Fund. The Fund's manager is AIF Capital Limited, one of Asia's largest independent private equity firms, overseeing $1 billion in capital. Based in Hong Kong PRC, it has over ten years of private equity investing experience in Asia.
Objectives and Scope The Fund targets companies benefitting from Asia's economic growth, with a focus on two key trends: (i) further integration of Asia into global supply chain, and (ii) rising domestic demand driven by the emerging Asian middle class. The Fund focuses on an investment size of $10-50 million for influential minority expansion capital, buyouts, and special situation opportunities in companies with enterprise valuations of $50-500 million.
Linkage to Country/Regional Strategy ADB's country strategy for the People's Republic of China (PRC) recommends making markets work better by developing an enabling environment for the private sector; promoting good governance, the rule of law, and transparent regulation; supporting financial sector reforms; and expanding ADB's private sector operations. For India, ADB's country strategy and program 2003-2006 states that the private sector has a leading role to play in achieving growth targets. The strategy focuses on promoting an enabling environment for private sector development through (i) financial sector interventions to improve financial intermediation and resource mobilization; (ii) policy reforms to remove impediments to private investment-domestic and foreign; (iii) investment in public infrastructure, which also facilitates private investment; (iv) public-private partnerships; and (v) investments in private sector projects. For Indonesia, the country strategy and program (2002-2005) highlights the role of business investment in accelerating Indonesia's growth path and pays special attention to fostering a vibrant and competitive private sector.
Status of Development Objectives The Fund will help promote the growth of the private equity industry in the middle market segment. It can increase the amount of bank lending to businesses by (a) injecting equity to improve the balance sheet and borrowing power of the portfolio company, and (b) completing separate due diligence on the business opportunity to address any concerns the bank may have on the viability. The Fund Manager's ability to add value in terms of instilling best practices in corporate governance creates a demonstration effect, in which the standards of a given industry are improved.
Safeguard Categories
Environment FI
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The Fund Manager already possesses experience with respect to adhering to ADB's social and environmental safeguard policies through its existing funds. The Fund Manager has adopted an environment management system.
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 04 Aug 2005
Due Diligence 02 Sep 2005
Credit Committee Meeting 11 Apr 2006
Approval 31 May 2006
PDS Creation Date 18 Jul 2006
Last PDS Update 29 Sep 2014
Title Document Type Document Date
Proposed Equity Investment in AIF Capital Asia III Reports and Recommendations of the President Apr 2006

Safeguard Documents

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Evaluation Documents

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