Overseas Private Investment Corporation Investment Funds Call for Proposals

Latin America Capital Markets Fund

Call for Proposals

Supplemental Info
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Supplemental Information

Additional Questions to be answered within completed proposals

1. Describe the Fund’s procedures and practices for evaluating Fund investors to prevent the Fund from being used for money laundering or financing of terrorism.

2. OPIC will require a certification that neither the fund manager nor any of its affiliates has engaged in any “discouraged transaction” with the countries of Iran, North Korea, Sudan, Syria and Cuba. (See below for further details as to the meaning of “discouraged transaction”). Please confirm that you will be able to provide this certification.

Information about the certification described in Question 2 of the Supplemental Information Section

What is a “discouraged transaction”?

“Discouraged transaction” means any of the following activities:

An investment commitment of $20,000,000 or more in the energy sector in Iran, North Korea, Sudan, Syria or Cuba.
Any loan, or an extension of credit to the government of Iran, North Korea, Sudan, Syria or Cuba that is outstanding and has value of more than $5,000,000, including the sale of goods for which payment is not required by the purchaser within 45 days.
The transfer of goods included on the United States Munitions List, referred to in section 38((a)(1) of the Arms Export Control Act (22 U.S.C. 2778(a)(1)) to the government of Iran, North Korea, Sudan, Syria or Cuba within the preceding 3 years.

What is an “investment commitment in the energy sector of Iran, North Korea, Sudan, Syria or Cuba?”

Any of the following activities undertaken pursuant to a commitment, or pursuant to the exercise of rights under a commitment, that was entered into with the government of a state sponsor of terrorism or a nongovernmental entity in Iran, North Korea, Sudan, Syria or Cuba:

Including responsibility for the development or transportation of petroleum or natural gas resources or for the general supervision or guaranty of another person’s performance of such a contract;
The purchase of shares of ownership, including an equity interest, in the development of petroleum or natural gas resources described in (1).
The participation in royalties, earnings or profits in the development of petroleum or natural gas resources described in (1), without regard to the form of the participation.

Questions in response to the call for proposals:

The following questions were submitted in response to the call for proposals for the Latin America Capital Markets Fund. Included below are OPIC's responses.

OPIC's call appears to be primarily geared toward a private equity fund structure. Would a hedge fund (onshore/offshore master feeder structure) with a investment mandate of 75% in public equity and 25% in illiquids/private equity be qualified under the call?

While OPIC has utilized the Master Feeder structure in previous transactions, OPIC has a strong preference to support Funds where the majority of investments will be made through privately negotiated transactions and not via public equity instruments.

How would OPIC's debt be structured vis-a-vis other investors and payment of annual performance fees that are typical of a hedge fund?

OPIC debt can be structured to complement the idiosyncracies of a "typical" hedge fund.

OPIC does not want to represent more than 1/3 of the fund. Does the other 2/3 need to be raised in advance of the OPIC financing or is there time period available to raise those funds?

OPIC has traditionally been the first investor in many private equity pools allowing for a mutually agreed upon time period during which other funds are raised.

Will OPIC consider lending to a global Fund whose preponderance of investments is in Latin America?

OPIC will not lend to a global fund with a majority of assets in Latin America. Qualifying funds will be dedicated Latin America only vehicles.

Does the OPIC financing come with any restrictions on obtaining leverage at either the Fund or portfolio company level?

OPIC has a strong preference that the Fund have no other creditors. In some instances, OPIC will place restrictions on leverage at the portfolio company level dependent upon the strategy of the fund.

Will OPIC allow leverage on the fund junior to OPIC financing?

OPIC has a strong preference that the Fund have no other creditors.

Has OPIC funded managers starting their first Fund?

OPIC has funded managers starting their first Fund.