DCM Red Asset FIDC (IFC-41555)

Countries
  • Brazil
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
Completed
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."
Voting Date
Sep 9, 2019
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
REDASSET GESTAO DE RECURSOS LTDA
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)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 38.46 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.
Loan Amount (USD)
$ 38.46 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)
$ 41.00 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 May 15, 2024

Disclosed by Bank Aug 8, 2019

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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 IFC, the proposed project shall support the small and medium-enterprise (“SME”) lending activities of REDAsset Gestao de Recursos Ltda. in Brazil. This will be done through the acquisition of senior quotas of RED Performance FIDC NP, a debt fund managed by REDAsset.

People Affected By This Project
People Affected By This Project refers to the communities of people likely to be affected positively or negatively by a project.

The most significant, expected Project-level outcome is the increased capital market funding for the underserved SME segment through the growth of a FIDC instrument that finances SMEs, as follows:

Stakeholders - Increased capital market funding opportunities for SMEs as Originators: IFC anticipates that the Project will increase access to finance for Brazilian SMEs, helping to address the SME finance gap through a capital markets solution.

Stakeholders - Increased access to finance for MSMEs as Obligors: By acquiring receivables from the originators, the Fund contributes to the financial health of the supply-chain. With more funding available, originators are better positioned to sustain its growth and the growth of its clients, the obligors.

Market Creation - Competitiveness: Beyond the Project, IFC anticipates that this investment has the potential to promote greater market competitiveness through the following aspects: (i) the structural change through the increase in alternative financing opportunities for MSMEs, and (ii) the diversification of investment opportunities in the capital markets in Brazil.

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

The Project will acquire senior quotas of Red Performance amounting up to BRL160 million (approx. US$41 million equivalent). The Fund will channel the investment to the acquisition of receivables and other credit rights from SMEs.  

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.

According to the IFC, REDAsset group was established in 1992, specializing in credit operations to SMEs in Brazil and has the following ownership structure: (i) Hai Participacoes e Empreendimentos Ltda (46%); (ii) Lavan Participacoes e Empreendimentos Ltda (46%); and (iii) the rest belonging to its managing directors (8%).


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.

REDAsset Gestao de Recursos LTDA
Mr. Filipe Guimarães
Portfolio Manager
+55 11 3038 5838
Filipe.guimaraes@redasset.com.br
CEP: 01454901, São Paulo – SP, Brasil
https://www.redasset.com.br

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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How it works