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Case Study

IG4 Capital: Private equity with a purpose

By Benoit F. Leleux and Arthur de Bonis

17 pages

December 2024

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Reference: IMD-7-2545

SEPTEMBER 2023, SÃO PAULO (BRAZIL). Gustavo Buffara was painstakingly putting the finishing touches on the IG4 Private Equity Fund III presentation. Co-founded by Gustavo in 2016, IG4 Capital had grown to become a leading force in private equity in Latin America with a unique value proposition that focused on private equity special situations. With 52 professionals worldwide across seven offices (in São Paulo, London, Lima, Madrid, Bogotá, Washington, DC and Santiago), the firm was now heading to manage some $1.7 billion, with more than $1.1 billion invested in special situations over recent years. What made Gustavo particularly proud was the fact that the firm was able to operate not only under the highest sustainability standards, as an early signatory of the Principles for Responsible Investment (PRI), but also as a fully certified B Corp, a first in emerging market private equity. IG4’s portfolio companies now generated more than $2 billion of turnover with around 20,000 employees in different countries across Latin America, and many of them had achieved or were on their way to their own B Corp certifications. Could a Cerberus-inspired special situations strategy, often perceived as brutal, be adapted to a more culturally sensitive, developing-market equivalent, with clearer environmental, social and governance (ESG) integration? In other words, could “vulture capital” be turned into “culture capital”? The value proposition resonated with investors, and the track record of IG4 Funds I and II were now solid pillars upon which to build. But what else could the company do to ensure that its private equity investments in different segments, with a deep ESG toolbox, would help establish sustainable capitalism in the Latin American region? What else should it consider doing to reaffirm its ESG credentials even further?

Learning Objective

Can private equity be a driver of ESG-based transformation in large infrastructure projects (like water utilities)?
Can values be injected into the value-driven world of private equity?

Keywords

Finance, Emerging Market, Entrepreneurship, Sustainability, Infrastructure, Water Treatment, Water Distribution, B Corporation Certification, Environmental Social and Governance, Exit Strategy, Corporate Governance, Leadership, Growth Management, Value Proposition, Materiality, Clean Water, Sanitation, Affordable Energy, Clean Energy, Industry Infrastructure, Industry Innovation, Sustainable City, Sustainable Community, Responsible Consumption, Responsible Production, Climate Action

Settings

Brazil
IG4 Capital Partners, Finance and Insurance, Private Equity
2016-2024

Type

Field Research

Available Languages

English

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Teaching note

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