(August 13, 2010) — After allotting roughly $460 million with real estate and debt funds this month, Mexican private pensions are on their way to more than doubling their investment in private equity in 2010.
According to Reuters, the 14 pension funds, or Afores, may allocate 8% of their approximately $100 billion in assets to capital development certificates (CKDs) as a vehicle for Afores to make private equity bets.
In 2009, Afores purchased about $1 billion worth of new certificates through a variety of deals, and a multitude of new private equity deals are on the radar as Mexico’s pensions aim to increase returns, Reuters reported. Last month, Mexico’s private pensions announced putting $600 million into three private equity funds to help finance warehouses, distribution centers and other industrial real estate projects that provide higher returns. This month alone, Mexican airport tycoon Fernando Chico Pardo raised $200 million to finance his private equity fund, Promecap. Meanwhile, AMB Property Corp. launched a real estate fund with $260 million of pension cash.
While meeting the expanding demands of an aging population, Mexican President Felipe Calderon wants the Afores to additionally help finance roads, ports and other infrastructure projects.
Afores, or companies authorized to manage pensions, are currently Mexico’s largest institutional investors.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742