DARP SA Cerberus (IFC-45182)

Countries
  • Brazil
  • Colombia
  • 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."
Voting Date
Sep 15, 2021
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
CERBERUS EMERGING MARKET SPECIAL SITUATIONS FUND I, 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)
$ 100.00 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)
$ 500.00 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 3, 2022

Disclosed by Bank Jun 1, 2021

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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.

The proposed project entails investing in Cerberus Emerging Market Special Situations Fund, L.P. (the Fund), a fund managed by Cerberus Capital Management, L.P. (Cerberus or the Manager). The Fund will invest in credit opportunities in Emerging Markets, primarily targeting stressed/distressed companies, with focus on Latin America and Caribbean (the Project).

Stakeholders impact
The Project will support the acquisition and resolution of NPLs by allowing financial institutions to offload distressed assets. In turn, this helps them to release capital, decrease liquidity needs, and reduce their costs associated with the management of these assets. As a result, this will enhance the capacity of these financial institutions to increase lending. It will also help debtors to normalize their defaulted obligations, regain access to credit, and return to actively participate in the financial system. Lastly, the Project will support stress/distress small and medium sized enterprises (SMEs) and corporates by providing credit and the much-needed liquidity to improve their financial health, continue their operations, and ultimately preserve jobs.

Market impact
The Project will contribute to further develop the Latin American distressed asset space especially in Brazil, Colombia, and Mexico. The Project will likely generate a positive demonstration effect by fostering the participation of more players to the region, which is critical to create a vibrant, well-functioning and efficient environment for distressed investing.

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

The Fund has a target size of US$500 million, of which IFC will provide an equity investment of up to US$100 million, limited to 20% of the Fund’s total capital. The remaining capital will be provided by third-party investors and the Manager, which will contribute with 5% of the Fund size, limited to US$25 million.

Founded in 1992, Cerberus is a global alternative investment manager with US$55 billion of asset under management as of March 31, 2021. Together with its affiliated management/general partner entities, operations companies and loan servicing companies it has over 800 employees, and 25 offices across the U.S., South America, Europe, Asia, and Africa as of April 1, 2021.

 

Cerberus has an established track record across different strategies, including global credit (e.g. corporate credit, direct lending, etc.), non-performing loans (NPLs), real estate and private equity.

It operates in an integrated manner, leveraging on its sourcing capabilities, detailed due diligence, and enhanced ability to operate on a worldwide basis. Cerberus is majority-owned by Stephen A. Feinberg.

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 Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
Cerberus Capital Management, L.P. Client Finance contracts with International Finance Corporation (IFC) Investor Finance

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.

**Project contacts not available at the time of disclosure.**

 

ACCESS TO INFORMATION

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If you believe that your request for information from IFC has been unreasonably denied, or that this Policy has been interpreted incorrectly, you can submit a complaint at the link above to IFC's Access to Information Policy Advisor, who reports directly to IFC's Executive Vice President.

ACCOUNTABILITY MECHANISM OF IFC/MIGA

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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