Deva EM Credit Recovery Fund

The project consists of an IDB Invest anchor investment of up to US$50 million of the capital commitments in the EM Credit Recovery Fund (the “Fund”), a new global Emerging Markets (“EM”) credit recovery investment platform which is being established to provide additional and more efficient credit recovery solutions to nonperforming borrowers and Small and Medium-Sized Enterprises (“SMEs”), while providing liquidity and capital relief to banking and credit markets for Distressed Assets (“DA”) resolution and servicing infrastructure development to increase capital efficiency and help offset impacts of Non-Performing Loan (“NPLs”) across Latin America and the Caribbean (“LAC”) and other EM globally (the “Project”). 

The Fund will be sponsored by Deva Capital (“Deva” or the “Sponsor”), a global investing platform part of the Santander Group founded in 2019 and focused on distressed assets and special situations globally, including in emerging markets.

With a target size of US$1.5 billion, the Fund is expected to mobilize Development Finance Institutions (“DFIs”) and global institutional investors’ capital to (i) create and support more flexible and efficient tools and forum to resolve distress situations and help borrowers regain or maintain access to credit and thereby promoting financial inclusion; (ii) support troubled companies, especially SMEs, to help solving their distress situation which allows to maintain the business, preserve jobs, and keep the assets productive; and (iii) provide to banks and other financial intermediaries much-needed capital relief and tools to manage the increasing stocks of DAs that are clogging their balance sheets so they can continue lending. 

The Fund can play a key role in LAC’s economic growth on the back of the aftermath from the COVID‑19 crisis, given the large and urgent need for capital investment in the region to help banks with DAs to unlock credit and help SME and individuals to resolve their distress situation.