International Finance Corporation (IFC), a member of the World Bank Group, is considering an equity investment of up to $25 million and a discretionary co-investment envelope of up to $20 million for a Latin America-focused private equity fund managed by ACON Investments, according to project disclosures seen by DevFiNews.
The proposed investment will support ACON Latin America Opportunities Fund VI, which targets mid-market companies across Brazil, the Andean region and Mexico, with a focus on sectors including healthcare, financial services, energy transition, connectivity and consumer-related businesses.
IFC said its commitment, alongside other development finance institutions, is expected to help the fund reach its first close and mobilize additional capital from private investors in later fundraising rounds.
The proposed investment comes as private equity fundraising in Latin America remains subdued outside Brazil, increasing the role of development finance institutions in channeling long-term capital into underserved mid-market companies.
Mid-market businesses in Latin America often face limited access to long-term growth capital, particularly during periods of weaker fundraising activity.
The fund is expected to invest between $30 million and $100 million per transaction and will pursue opportunities aligned with household consumption, healthcare and wellness, exporters, climate and energy transition, and financial services.
Washington-based ACON has invested in Latin America since 1997 and operates offices in São Paulo, Bogotá and Mexico City.
According to the disclosure, the fund is also expected to support inclusion in Latin America’s private equity market through commitments to women-owned or women-led businesses.
IFC classified the proposed investment as Category FI-2 under its Sustainability Framework, citing medium environmental and social risks linked to sectors including healthcare, telecoms, retail and energy transition. Potential risks include labor and working conditions, occupational health and safety, supply-chain management, pollution prevention and community health and safety.
The fund will be prohibited from investing in coal-related activities, non-RSPO palm oil, K-12 education and other higher-risk transactions restricted under IFC standards.
IFC said the fund manager maintains an environmental and social management system that will be enhanced to align more closely with IFC risk-management standards and performance requirements.