IFC Asset Management Company: Mobilizing Capital For Development

IFC Asset Management Company: Mobilizing Capital For Development

By
William F. Meehan, Ali Gara
2016|Case No.F313| Length 23 pgs.

This case explores the International Finance Corporation’s (IFC) creative and effective use of the private equity business model as a tool to mobilize financing for economic development around the world. In its bid to provide more capital for private sector investment in developing countries, IFC played a key role in the emergence of the private equity industry in these markets through its funds’ investments and, later, created its own third-party fund management platform—IFC Asset Management Company (AMC).

Through the experience of AMC, the case considers broader issues typically faced by a private equity business in setting its strategy.  These include: How can a fund manager decide the optimal size of assets under management?  Given its resources and capabilities, what new funds could a firm raise and what sectors should it target?  The case further delves into the working mechanisms of AMC and thereby explains how AMC, as a special type of fund manager, handles different phases of private equity business.

Finally, the case considers the key challenges IFC and AMC face today and assesses what the future might hold for each.  As the largest global development institution focusing on the private sector, IFC had been an important player in developing countries.  However, IFC’s target markets continue to rapidly evolve and attract more capital and players, both local and international. How could IFC stay relevant and continue to play a differentiated leadership role in emerging markets under these circumstances?  What other products and services could it offer to support the private sector in these countries in a distinct and impactful way?

Learning Objective

By looking at the experience of International Finance Corporation (IFC) and its fund management arm, IFC Asset Management Company (AMC), the case explores how the private equity business model can be an effective tool for facilitating economic development in emerging markets. The case also delves into some of the broad strategic questions a typical private equity business might face. Students will also become familiar with the evolving nature of private investment in emerging markets.

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