French group to fund middle-market firms

THE infusion by Paris, Francebased Proparco SA in a private equity fund in Manila is expected to bankroll the local operation of several middle-market firms and allow thousands of workers to stay employed.

Proparco, the French Development Agency’s private-sector financing arm, has poured in $15 million (about P758.643 million) in private equity firm Navegar Fund II LP. The capital inflow is expected

to finance the growth of six to eight middle-market firms in the country and sustain the employment of above 10,000 workers, half of who are women.

The investment is said to be

Proparco’s first ever in the Philippines. The money will contribute to Navegar Fund II’s first close of nearly $130 million on the way to a target final closing of $150 million.

The Navegar Fund II is geared toward bridging a financial gap that remained a challenge for small-scale and medium-sized firms. The fund manager also targets sectors that benefit from steady domestic demand and operations that contribute to inclusive growth, including health, education and logistics.

Manila-based Navegar is a Philippines-focused private equity firm that provides growth capital to established private entities.

Established in 2012, Navegar manages Navegar Fund I and Navegar Fund II with total assets in its portfolio of over $250 million. It invests in both primary and secondary share offerings, and actively seeks to maximize the value of its portfolio firms by providing financial, operational and strategic guidance, according to its web site.

On the other hand, Proparco has been investing in businesses and financial institutions—such as Navegar—in Asia, Africa, Latin America and Middle East to support sustainable economic, social and environmental development.

Proparco is a limited liability company (SA) and a subsidiary of the Agence Française de Développement (French Development Agency). It bankrolls firms whose activities help create jobs and decent incomes, as well as provide essential goods and services, and support the fight against climate change.

Last year France was the country’s third-largest source of foreign investments among European Union member-states, behind the Netherlands and the United Kingdom.

Based on Philippine Statistics Authority records, French investments in the Philippines jumped to P2.56 billion, from P99.3 million in 2017. The Netherlands and the UK poured in P4.05 billion and P3.81 billion to the country, respectively.