How the investment process works
The Call Process
OPIC initiates the fund manager selection process every quarter (the “Call Process”). A selection committee comprised of an internal OPIC team and an independent private equity consultant conducts extensive manager evaluations. All applications that meet the published selection criteria will be considered. Generally, the evaluation of prospective fund managers is based on the following criteria:
- The viability and thoughtfulness of the proposal.
- The relevant track record of the prospective management team.
- The cohesiveness of the management team, and its experience managing third-party capital.
- The ability of the manager to raise sufficient equity capital to support the investment thesis.
Innovative Financial Intermediaries Program (IFIP)
In addition to the Call Process, OPIC also has the Innovative Financial Intermediaries Program (IFIP), designed to help provide support to smaller equity funds, debt, and hybrid funds. Applications for this program are accepted on an ongoing basis and reviewed quarterly. Please visit the IFIP webpage to learn more about this program.
The Funding Process
As required by congressional statute, OPIC’s position in the capital structure of private equity funds is in the form of a non-amortizing loan to fund. OPIC issues certificates of participation (COPs) in the U.S. debt capital markets, the proceeds of which are provided as a loan to the private equity fund. The COPs are guaranteed by the full faith and credit of the U.S. government. The base interest on each COP, which is dependent on duration (determined by the fund manager), generally is comprised of the appropriate U.S. Treasury STRIP yield plus a variable spread as determined on each transaction in the U.S. debt capital markets at the time of COP issuance. The base interest is paid to the COPs investors, not OPIC.
- OPIC will generally not contribute more than 25 percent of a private equity funds capital base.
- OPIC requires either that the fund manager or general partner be majority-owned by U.S. persons, or a percentage of the limited partner capital (typically, an amount equal to 25% of the OPIC financing) be provided by U.S. investors.
- All OPIC financed investments must comply with OPIC’s policy requirements related to environment, worker rights, human rights, and US economic impacts.