The ALAC Fund is a CO-investment fund that invests alongside IFC in equity investments in Sub-Saharan Africa, Latin America, and the Caribbean, providing growth capital for private enterprises in these regions. The fund has a total of $ l billion capital of which SOFAZ contributed $100 million. The new fund which was set up in March 2010 follows World Bank President Robert Zoellick call in 2008 for sovereign wealth funds to invest in equity in sub-Saharan Africa. "Pension and sovereign funds represent a significant savings pool that is seeking commercial returns and portfolio diversification," said Zoellick in a statement. "With this fund, we will demonstrate that developing countries have high-quality investment opportunities to attract commercial investors."

Along with SOFAZ, the UN Pension Fund, the Dutch Pension Fund, the Korea investment Corporation, the Ministry of Finance of the Saudi Arabia Kingdom, the IFC Asset Management Company and the sovereign fund of A bu Dhabi also invested in the fund.

The economic and investment environment in Africa, Latin America and the Caribbean continues to remain strong and stable, in general. However, they are less willing to invest in this region due to their lack of-understanding of these markets and the associated risks. IFC, on the other hand, has a strong local presence in many of the countries in the region and enjoys a special status as a lender and as an investor. IFC ALAC Fund will be an ideal vehicle that bridges the information gap between sovereign and pension funds and successful private enterprises in frontier markets that require growth capital.

To date the fund has made fewer than ten investments mainly in the banking, insurance, construction materials, hotels and transportation companies. The current investments are concentrated in Mexico, Nigeria, Togo, Ghana and Trinidad and Tobago. Several investments in Brazil and Kenya have also been approved and shall soon be executed.

ALAC fund in which SOFAZ invests is a part of a strategy to foster sustainable economic growth in developing countries by supporting private sector development. For example, the fund's investments in the financial sector help to strengthen the banking sector in the aftermath of the global financial crisis. The strategy includes providing long-term financing to help well-managed, systemic banks to improve their reach to smaller businesses and other underserved market segments, helping partner banks to improve their corporate governance and risk management, as well as developing robust environmental and social monitoring systems.

Moreover, the investments in the construction materials company by supporting the company's expansion plans, will contribute to the development of the local infrastructure and housing sectors, improve the supply and production standards of locally produced cement, and create employment opportunities.

Not only do SOFAZ's investments through ALAC fund provide growth capital to these companies, they also encourage the development of a sound corporate governance framework, risk management systems and investment analysis.