Opic in Action

In recent years, OPIC has experienced increased demand for financing from managers of investment vehicles that, due to their smaller size and/or specialist strategies, were often unsuccessful in OPIC’s mainstream calls for fund proposals. Similarly, because these strategies were structured as pooled investment vehicles, they were ineligible for the direct lending product offered by the Agency’s Small and Medium Enterprise Finance department.

To respond to this demand, OPIC launched the Innovative Financial Intermediaries Program (IFIP) in November 2013.   IFIP is a $500 million program to support smaller-scale financial intermediaries/vehicles investing in enterprises in OPIC-eligible countries, with a specific focus on impact and innovation. IFIP has enabled OPIC to develop a process to consider these unique, smaller structures and respond more effectively to them while leveraging the expertise and best practices within the Agency’s finance and investment funds departments.  

Eligibility

As with all OPIC projects, investments made through this program are required to comply with OPIC's U.S. investment eligibility requirements, as well as its environmental, social, worker rights, and U.S. effects standards and criteria.

The chart below provides key information on eligible structures for IFIP; however, OPIC strongly recommends that potential applicants use the IFIP Eligibility Self-Screener to determine if their proposed vehicle meets the minimum requirements for application to IFIP. 

IFIP-Eligible Structures

Maximum Fund Capitalization*

OPIC Commitment Description
Small Equity Funds $100M Up to 1/3 of total fund capitalization; capped at $33.3M Funds that make equity and equity-like investments, including mezzanine and subordinated debt, into portfolio companies.
Hybrid Funds and Debt Funds $100M Up to 2/3 of total fund capitalization**; capped at $50M Includes, inter alia, funds that make investments into portfolio companies in the form of: both debt and equity; solely senior debt; or both senior and subordinated debt.
Non-Bank Financial Institutions and Intermediaries No Limit Up to 1/3 of total fund capitalization (equity-focused NBFIs) and up to 2/3 (debt-focused NBFIs); capped at $50M Start-up non-bank financial institutions with characteristics similar to an operating company.
Hybrid Microfinance Investment Vehicles (MIVs) No Limit Up to 2/3 of total fund capitalization**; capped at $50M MIVs investing 25% or more of their total portfolio as equity.

* Including OPIC's participation

** The level of financing that OPIC will consider is largely commensurate with the risk of the investment strategy of the fund, in terms of forms of capital the fund will deploy and the target portfolio composition. Generally, the higher end of the range will be considered for funds investing a higher level of debt than equity.

Evaluation Criteria

Applications submitted through the IFIP application website will be evaluated on a range of criteria, including the following:

Fund Strategy

Management Team

Track Record

Fundraising

Governance

Impact Potential

- Clarity of Investment
 Objectives

- Pipeline of Opportunities

- Innovation

- Years of Relevant Experience

- Team
 Composition

- Years Working  Together

- Relationships & Resources

- Fund Manager  & Investment  Team Deal  History

- Value Created

 

- Capital  Commitments  to Date

- Demonstrable Funding Pipeline

- Previous  Fundraising  Track Record

- Compensation, Carry

- Conflicts of Interest

- GP  Commitment
 

- Impact Intent

- Target  Population

- Scalability

 

IFIP Application Process

The application process involves submission of a questionnaire, pitch book, diagram of vehicle structure, and financial model. OPIC accepts proposals on an ongoing basis and reviews them quarterly with the assistance of an external investment advisor.

To begin the application process, please create an account and submit a completed IFIP questionnaire along with the required supporting materials.

The next quarterly deadline is January 31, 2017.

To learn more about the Innovative Financial Intermediaries Program, please visit the IFIP application website. If you have any questions after reviewing the website and FAQ please contact us at IFIP@opic.gov