Apr 15, 2014

• Measures will contribute to developing the capital market  

The BNDES’ board of directors has approved two programs to support the Brazilian capital market, focusing on developing venture capital and private equity industries, as well as company access to the Stock Market. These include the Multisector Funds Program and the Support Program for Public Offerings on the Access Market, with a total of R$ 3 billion. This will include the BNDES’ investments through funds and directly, in the IPO (initial public offering of stocks) of smaller enterprises. 

Multisector Funds Program – The BNDES will invest R$ 2 billion in 12 private equity and venture capital funds over the next two years. These resources may leverage up to R$ 10 billion in approximately 90 companies, seeking growth and improvements to their management and governance structures.

Investments will be carried out by BNDESPAR, an integral subsidiary f the Bank, through four biannual public calls-to-bid that will take place in 2014 and 2015. The release date for the first call-to-bid is scheduled for the upcoming weeks.

The public calls-to-bid process will involve selecting proposals for investment funds in varied sectors and of differing natures, which will be submitted to the BNDES by their respective managers. In the assessment criteria for each proposal, the investment policy of the fund, the business history of the manager in the fund industry, and the qualification of the management team will be assessed.

The biannual calls-to-bid will offer the market predictability to submit their proposals to the BNDES, and they will be selected in accordance with the Bank’s priorities.

The systematic calls-to-bid aims to induce the entry of new investors into the market, boosting investment resources, as well as helping structure pioneer products in the national market, strengthening Brazil’s private equity and venture capital industry. 

Access Market – The BNDES Support Program for Public Offerings in Access Markets will invest up to R$ 1 billion in public offerings for Brazilian enterprises in the access market. BNDESPAR can work as anchor investor, guaranteeing firm subscription of up to 20% of the offering’s value, respecting certain requirements, such as a majority primary offering.

Furthermore, the BNDES will carry out a specific public call-to-bid to select a manager for the pioneering Investment Fund for the Access Market. The fund, which may have 30% of the BNDES’ participation, aims to attain R$ 250 million in equity and will operate in the pre-IPO as well as after the enterprise has opened it capital, assisting in the liquidity of negotiated papers. Companies that take on the commitment to being listed and negotiated on the Access Market may receive support.

These two initiatives to support the access market were idealized to contribute to developing the Brazilian capital market, making it accessible to a larger number of companies that seek to make initial stock offerings with lower values than those commonly seen in the country.

Additionally, the BNDES encourages listing enterprises on its Bovespa Mais portfolio, which is currently the only structured segment for the access market in Brazil. Over the last two years, BNDESPAR has actively participated in six listings and in one IPO on Bovespa Mais. 

Institutional Development – The BNDES was one of the pioneering agents in the investment fund industry in private equity and venture capital in Brazil, not only in allocating resources, but also contributing to the industry’s legal frameworks and formulating innovative products.

Presently, the BNDES is among the largest Brazilian investors in national private equity and venture capital industries, with R$ 2.5 billion of capital committed to 34 funds, which has allowed it to boost around R$ 10 billion in investments. There are more than 160 invested companies in 20 states across the federation.

In national seed and venture capital, the Bank is highlighted as the largest investor in the country, with a portfolio of over 100 small and medium-sized enterprises of a technological nature, in sectors such as IT, new materials, biotechnology and nanotechnology.

The Bank participates in the Technical Committee of Smaller Offerings, formed by capital market agents, investors, companies and intermediaries, aiming to develop the access market in Brazil. Among the presented proposals and currently being implemented, highlights include attracting new investors, regulatory adjustments in investment funds, reducing costs and simplifying the offering process.