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Summary of Proposed Investment
This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.
KAIZEN PRIVATE EQUITY LLC
Private Equity/Venture Cap Fund - Sector
Date SPI disclosed
January 19, 2011
Projected board date
February 25, 2011
Invested: October 7, 2011
Signed: May 6, 2011
Approved: April 27, 2011
Kaizen Private Equity LLC (“Kaizen” or “the Fund”) is an approximately $80 million single sector private equity fund dedicated to investments in the education sector in India. The target Fund size is capped at $100 million with over 50% of the investment expected from institutional investors. The Fund aims to provide capital financing to education companies in their growth stage and will focus on operational improvements in its portfolio companies. Kaizen will be the first education sector-specific private equity fund in India. The Fund will be incorporated under the laws of Mauritius as a public limited liability company.
Project sponsor and major shareholders of project company
The investment manager is Monterey Capital Management (MCM) and investment advisors to the Fund are Kaizen Management Advisory Private Limited (KMA). Kaizen was founded by Sandeep Aneja, who is currently the Managing Director. In addition to Mr. Aneja, the core team includes four directors of KMA; Jetu Lalvani, Amit Ratanpal, Monica Mehta, and Akhil Shahani.
Total project cost and amount and nature of IFC's investment
IFC is proposing an equity investment in the Fund.
IFC investment as approved by Board
10 million (USD)
IFC Investment (million USD)
* These investment figures are indicative
Location of project and description of site
Kaizen Management Advisory Private Limited has its head offices in Mumbai India and does not have branches. Kaizen’s head offices address is 5 Master Chambers, 1 Cinema Road, Mumbai – 400 020, India. The Fund investments will be made throughout India.
Anticipated development impact of the project
The project is expected to have a high development impact in the following areas:
Provision of long-term equity capital to institutions in the education sector value chain and thus increasing access to education in India. This type of funding is not readily available in the market.
Operational improvements to portfolio companies in the education sector in India through the value add role of the Managers. This will improve the quality and sustainability of education sector institutions in India and make them more attractive to strategic investors.
Demonstration of successful private equity investments in an underserved sector, thereby building confidence amongst institutional investors to invest in India and the sector.
IFC's expected development contribution
IFC’s expected Additionality:
Provision of equity financing to small and medium sized enterprises in the education sector in India.
Catalytic role – IFC’s commitment would act at a stamp of approval and play a catalytic role in attracting investments to Kaizen and the sector.
Value added advice – IFC will contribute to international best practices in the corporate governance and structure of the Fund. Also, through participation in the Advisory Committee, IFC will share its global expertise, resources and knowledge on the education sector to build capacity at the portfolio company level.
Environmental and social issues - Category FI
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal, IFC analyzed the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determined the Applicable Performance Requirements. While it is not the primary activity, the fund’s investments may involve construction/ acquisition/ renovation of educational facilities. Based on an analysis of the potential Social and Environmental risks associated with the future sub-projects and considering IFC’s investment, the Applicable Performance
· The IFC FI Exclusion List
· The applicable National Social and Environmental Laws and regulations; and
· The IFC Performance Standards
IFC also appraised the FI’s HR practices and reviewed the FI’s existing Social & Environmental Management System (SEMS), and FI capacity to implement the same. It was found that the FI has put in place the basic SEMS and has sufficient capacity to implement the same. The FI has satisfactorily informed the IFC regarding its HR management practices and working conditions.
Based on the Applicable Performance Requirements and FI SEMS and capacity review, the project will be required to:
· Update its existing SEMS to the satisfaction of IFC, to ensure the compliance with the Applicable Performance Requirements - prior to commitment;
· Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements; and
· Submit a periodic report to IFC as per a format to be provided by IFC.
· Submit the environmental and social due diligence reports for the first three projects, prior to the Fund’s investment, to ensure that the SEMS is adequate to identify and manage the subproject’s environmental and social impacts."
For inquiries about the project, contact:
Mr Sandeep Aneja,
Kaizen Management Advisory Private Limited,
5 Master Chambers, 1 Cinema Road,
Mumbai – 400 020,Maharashtra, India
Tel:: +91 (0) 22 66153335/6
For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Local access of project documentation
Kaizen Management Advisory Private Limited, 5 Master Chambers, 1 Cinema Road, Mumbai – 400 020.
International Finance Corporation, Vibgyor Towers, 6th Floor G Block, C-62 Bandra Kurla Complex Bandra East, Mumbai - 400 051