The Multilateral Investment Fund (MIF) the Inter-American Development Bank's private-sector arm that promotes opportunity for small and microenterprises, has committed up to $5.5 million to the fund CoreCo Central America I L.P. (“CoreCo”), which will invest in small and medium-sized businesses (SMEs) in Central America.
The Fund will invest in up to 10 early and growth stage investments in Guatemala, Belize, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, and Dominican Republic, with a focus on companies in fast-growing service sectors such as healthcare, business services, IT, telecommunications, financial services, consumer goods, retail, and logistics. Preference will be given to companies that have a presence throughout this region.
The fund plans to raise $50 million, and will be backed by a number of investors, including development finance institutions (DFIs) and family offices that manage and invest money that belongs to high net worth families.
The objective of this project is to contribute to SME development by investing in a venture capital fund operating in Central America. The specific objective is to increase the availability of venture capital financing in Central America. The main beneficiaries will be not only the SMEs that will receive investment and hands-on guidance from the fund manager, but also local workers who will be hired by these SMEs as they grow and create jobs.
CoreCo is the first Central American fund targeting SMEs that has attracted a significant amount of private investment. To date, CoreCo has raised $8MM from private investors, and aims to raise additional private capital. This could serve as an important precedent for the Central American venture capital/private equity industry, and could contribute to the growth of this kind of financing in the region.
CoreCo is an initiative of Alex von der Goltz and Will Muecke, both Principals of CoreCo Management Inc., the fund’s management company. Mr. von der Goltz is a native of Guatemala, and has 12 years of growth capital investing. Prior to co-founding the fund, he was a Partner at Boston Capital Ventures (“BCV”), an early-stage growth capital fund based in Boston, MA. Mr. Muecke has 14 years of investment banking experience. Prior to co-founding the fund, he was a Managing Director and Co-Head of Healthcare Services at Goldman, Sachs & Co in New York, NY. The Principals will capitalize on their business and investment experience within the US and Latin America.
“The MIF is delighted to see a new management company focusing on Central America, a promising region,” said MIF project team leader Susana Garcia-Robles. “The partners’ experience will be used to transfer the best practices of U.S. industry to Central America. This is a direct result of how the Latin American Region as a whole weathered the recent crisis, and the fact that investors overseas began to focus on LAC as an attractive investment destination.”
An autonomous fund administered by the IDB, the MIF promotes the development of microenterprises and small and medium-size businesses in Latin America and the Caribbean, providing access to various forms of financing and knowledge networks.
- Gador Manzano