Capital Indigo Asesores Indigo S.A.P.I. de C.V. (Capital Indigo), a Mexican private equity (PE) Fund Manager, is raising a US$60-80 million growth private equity fund (Capital Indigo Fund I) for investments in local SMEs.  The Fund was launched in late 2012 to invest equity or mezzanine debt in targeted Mexican SMEs and selectively in proven, strong entrepreneurs. Investment size will range from US$3-10 million, aiming to secure either a majority ownership interest or a mezzanine structure with warrants/equity kickers. The Fund will target investment opportunities driven by three long term trends: i) the growth of a young and emerging middle class; ii) the increase in demand of health-related products and services; and iii) sectors that benefit from a transformation into a greener and more sustainable world.   The Fund is an early mover in the SME private equity industry in Mexico, where there is low competition from financial institutions and private equity funds that typically seek to invest larger sums of capital per transaction. Target companies will have a clear competitive advantage locally and/or internationally due to manufacturing process, technology or business model and a clear potential to achieve a profitable exit within a two to six-year frame.   The Fund has been organized under the laws of Mexico as a private equity FICAP (Fideicomiso de Inversion en Capital Privado), a local trust used in raising private equity in Mexico. IFC is considering investing in the trust (which has catalyzed interest from other institutional investors). Capital Indigo is based in Mexico City. The Fund will observe both local and environmental regulations and the World Bank Groups performance standards. Mexico's middle class (about 40% of the population) is expected to double by 2025 (Bain 2013 PE in Mexico Report) and 17% of the population has moved into the middle class in one decade (World Bank).  The Fund is expected to contribute to the growth of SME companies that offer services and products for Mexico's emerging middle class and low income populations. The Fund will invest in 8-10 SMEs positioned in critical sectors that target these groups: education, health and the green sector. Private equity activity that supports mid-cap and large companies in Mexico has grown. The country has low private equity penetration compared to its peers in Latin America, particularly in the high growth SME space. Less than 5% of capital available for private equity focuses on growth SME with a ticket of less than $10 million. The Fund will support the growth and professionalization of SMEs and entrepreneurs by providing equity capital and management advice, improving environmental and social standards and mobilizing co-investments. The Fund's potential demonstration effect is high: successful fundraising and strong fund performance will send a positive signal to equity investors to consider mid-range investments in SME growth funds that will create new sustainable jobs, thereby contributing to economic development and employment.   IFC will measure and report on the following developmental impact indicators: i) percentage of funding disbursed; ii) net/gross financial returns; iii) number of jobs created; iv) annual growth sales; v) annual growth in EBITDA; and vi) launching follow-on funds, to mention a few DOTS indicators.