USD 4.80 Billion pesos invested in Escala Capital

(Bogota, August 19, 2009).- As part of its support for strengthening Colombian SMEs, the Andean Development Corporation made a capital contribution of 4.80 billion Colombian pesos to Fondo Escala Capital, which invests in small- and medium-sized Colombian enterprises with annual sales between US$3 and US$10 million in competitive sectors of the country.

The Fund has size of 75.8 billion pesos and is administered by Valores Bancolombia. Promotora de Proyectos acts as promoter of the initiative which channels funds to SMEs through contributions from important Colombian institutional investors such as Bancoldex and some pension funds.

The investment in private capital funds in favor of SMEs is one of the CAF's specific lines of action aimed at developing this business segment. With this type of instrument, the Corporation supports competitive companies which have successful business models, produce high value-added goods and services, are in phase of expansion, generate quality employment, and thus promote economic growth with equity.

Characteristics of the Private Capital Fund Escala Capital

Escala Capital is an initiative aimed at developing the private capital industry in Colombia through a fund whose objective is to invest in medium-sized Colombian companies with high potential for growth and expansion as a way of supporting their activities and development, before finally selling its interest.

The main focus of Escala Capital is investment in the sectors of health, specialized engineering, agroindustry, logistics, waste treatment and use, with the following characteristics:

• Annual sales between USD 3 and USD 10 million.
• Differentiated business model with barriers to entry
• High potential for expansion
• Capable and committed work team
• Shareholders and management aligned and willing to practice corporate governance
• Organized, truthful and audited accounting and financial information

Advantages for business owners

• They have capital funds which supplement the credit needed to back implementation of their plans and strategies for growth and development of the business.
• In addition to the capital, business owners receive the support of a management team and qualified analysis in order to implement systems and methodologies which analyze and detect business opportunities, guarantee execution of strategies, and follow up compliance with objectives and achievement of expected results.
• The Escala Capital fund makes available all its contact networks to the companies in its portfolio in order to facilitate their business activities.
• The participation of a private capital fund reinforces a results-based culture with a medium- and long-term view which benefits the business owners, the fund and their investors.