Vinci Impact and Return Fund IV is an impact investment fund created to provide growth equity for small and medium-sized enterprises (SMEs) in Brazil, with a focus on less developed regions.
On 30 March 2021, the Vinci Impact and Return Fund IV (VIR IV) concluded its final closing at the Hard Cap of $173 million. VIR IV acquired minority holdings in small- and medium-sized Brazilian enterprises (SMEs) with business models that exhibit growth potential and clear measurable environmental, social and governance (ESG) goals.
The fundraise represented additional long-term capital with formal lock ups of at least 10 years, raised through local and offshore institutional clients, high net-worth individuals, and retail investors.
The VIR IV strategy has concluded its two investments, with a total allocation of 10% of total commitments, since its first closing: a 43% stake in Pró Infusion, a leading outsourcing company of pharmaceutical compounding services, and a 33.3% stake in Oeste Saúde, a small-sized healthcare plan operator.
Founded in 2009, VIR IV is the first Private Equity (PE) growth fund in Latin America and the Caribbean to formally articulate an impact investing strategy that provides growth equity for SMEs that generate environmental and or social impact.
One Environmental Finance Sustainable Investment Awards judge praised the fund for its "thoughtful, structured process that is serving a great need". Another said, "the Vinci Impact fund is bringing much-needed investment to an underserved market and leading the of impact investing in Latin America and the Caribbean."
VIR IV has developed an impact management framework, which screens companies that serve, employ, or source from a disadvantaged group and/or that provide a developmental product or service; embeds impact considerations into the investment decision-making process; and provides a rigorous structure for impact measurement and accountability at the investment level, as well as the fund level.
José Pano, partner and Head of the VIR strategy, said, “VIR IV is a one-and-only strategy that seeks attractive market returns to our investors and at the same time allows us to see the impact generated in our society, with quantifiable ESG ratings for each of the fund’s investments. We remain one of the few alternative asset managers in Brazil with an active impact-oriented private market strategy, which really sets us apart from the competition. We have a great opportunity for this type of investment in Brazil and trust that with the team’s track record we can achieve not only results in line with investors’ expectations, but also significant ESG improvements to our portfolio companies.”
Marisela Alvarenga, IDB Invest’s division chief, financial institutions, said, “we want to congratulate Vinci Partners for this award, which recognises a like-minded fund manager that has successfully articulated an impact investing strategy, that not only seeks market-level returns but deliberately pursues measurable socio-economic impacts, in line with the United Nations Sustainable Development Goals and enhancing ESG standards. VIR IV’s investment thesis is aligned with IDB Invest’s efforts to increase SME’s access to finance by providing long-term capital to high-growth companies, in sectors that can have an important impact on jobs and growth. We’d be glad to see this impact investment strategy replicated across Latin America and the Caribbean.”
