Greenpark, IFC target emerging markets secondaries

Industry participants endorse the project's motives but say it is difficult to assess the chances of success given the paucity of information available on the fund. It remains to be seen how effective IFC can be on the deal sourcing side and it is unclear to what extent the fund will focus on more mature geographies - arguably duplicating exposure that can be obtained through existing players - versus true frontier markets.

Two secondaries investors tell AVCJ that they looked at IFC's initial proposal for the fund and decided against pursuing it.

"The key is whether IFC is able to source LP stakes through its existing GP relationships," says one industry participant. "If it went to each of these 300-plus funds and asked if there are any sellers among the LP base that would be very helpful. But can it deliver?"

Although the fund has received added impetus with recent opening of Greenpark's Hong Kong office and the appointment of Chin Chin Teoh, former co-head of Bank of America Merrill Lynch's private equity unit, as head of Asia operations, it is not new. IFC disclosed its proposed investment - providing up to 20% of the corpus for an EMSF no larger than $500 million - in late 2009 and it was approved in early 2010 with no manager attached.

"The EMSF will support access to capital for companies in developing countries through providing liquidity to selling LPs, enabling GPs to keep their capital bases whole and thereby strengthen the overall appeal of private equity investments in the emerging markets," IFC said in the proposal.

It first emerged that Greenpark had won the management mandate in mid-2011. Market sources familiar with the situation said that the EMSF will make its initial investments in Asia before moving into Latin America, Africa and Eastern Europe. "It's going to be a fairly organic process," the sources say. "For example, the existing presence in Japan will work on fundraising and reaching the LP community in the region. So they will open in Japan and use that as a springboard for activity elsewhere."

The fund would presumably have to move into Asia's genuine emerging markets in order to comply with IFC's development remit. As one secondary investor points out, however, a lack of liquidity is just one of a variety of issues that make LPs wary of exposure to the likes of Malaysia and Vietnam.

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• Topics
• Secondaries
• Secondaries
• Fundraising
• Greenpark Capital
• IFC
• Secondaries
• Fundraising