Alta Growth Capital, Mexico Fund III, L.P. (IFC-40809)

Countries
  • Mexico
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
ALTA GROWTH CAPITAL, MEXICO FUND III, L.P.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Equity
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 150.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 250.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Aug 8, 2018

Disclosed by Bank Mar 20, 2018

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the International Finance Corporation (IFC), this project consists of an IFC equity commitment in Alta Growth Capital, Mexico Fund III, L.P. to drive growth, expansion, and operational efficiencies at investee level. This is because Alta takes significant minority or control stakes in its portfolio companies, and then uses the 5-7 year holding period to add value through:

(i) Building strong partnerships with investees through alignment of interest and common values

(ii) Implementing effective management teams and proper incentives

(iii) Driving growth plans by having at least two partners work on each company and implementing initiatives such as the 100 day plan

(iv) Closely monitoring investee performance

(v) Partnering with IFC to institutionalize and bolster (a) international ESG standards; (b) prudent valuation methodologies; and (c) transparent and consistent reporting standards; (vi) Being active at board and committee level

(vii) Having an active independent advisory board that provides a network of executives for investees, among others.

The IFC also expects the project to have a positive impact on competition. 

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The International Finance Corporation has given the project an environmental and social category FI-2 rating which corresponds to a B rating or medium risk.

The International Finance Corporation gives the following explanation for its bank risk rating: "The Fund will invest in a diversified portfolio of growth equity and buyout investments in mid-market Mexican companies. The Fund will seek to deploy capital across its target markets and in sectors including Retail, Consumer Goods, Financial Services, Entertainment, Manufacturing and Healthcare. While the Fund could potentially invest in activities of high Environmental and Social ('E&S') risks, the general E&S risks are considered medium and mainly entail limited adverse E&S risk and impacts that are few in number, generally site-specific, largely reversible and readily addressed though appropriate mitigation measures. Therefore, this project has been classified as Category FI-2 according to IFC's Environmental and Social Review Procedure. The Fund Manager will be required to ensure compliance of the investments made with the IFC Exclusion List, Applicable national laws and regulations and the IFC Performance Standards."

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Alta is seeking to raise US$250 million in capital commitments. The proposed IFC equity commitment is up to US$15 million, not to exceed 20% of aggregate capital commitments in the fund.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

The International Finance Corporation describes fund managed by Alta Growth Capital Management Mexico (GP) III, L.P. as "an Ontario-based limited partnership which serves as the general partner of the Fund. Alta is managed by AGC GP Management, LLC, a Delaware limited liability company which is comprised of five investment professionals that have been working together for between 7-12 years. Alta Growth Capital, S.C. is a civil partnership established under the laws of Mexico which will provide investment advisory services to the Fund pursuant to an investment advisory agreement."


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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