Latin America: Blackstone joins international roster of Mexican CerPI funds 

30 May 2018 - 04:32 pm UTC

Multiple international investors have filed documentation with Mexican market regulator CNBV to launch infrastructure-focused investment funds known as CerPI (Investment Project Securitization Certificates). 

These include Blackstone (BX Mexico Advisors), EIG (EIG Global Energy México), Lexington Partners (Administradora Lexington Partners) and Partners Group (Partners Group Cayman Management IV). The firms did not comment.

As investment vehicles enabling institutional investors to deploy capital in Mexico and abroad, these CerPIs joined offerings from BlackRock (BlackRock México Infraestructura III), KKR (KKR de México) and FINPRO, which is preparing a debt-focused CerPI.

"The big picture is that local pension funds in LatAm have been part of the development of the investment eco systems in the region in Mexico, Brazil, Peru, Chile and Colombia," Cate Ambrose, president of LAVCA, told Inframation. "In Chile, Peru, and Colombia, pension funds have been committing to global private equity firms for quite some time now. In Mexico, the country has a young demographic and large AUMs for its pension system, but they haven’t been allowed to invest outside of Mexico until this year. It’s an enormous amount of money and it’s all been concentrated on the Mexican market.”

For the private equity firms, the CerPIs provide a way to broaden their pool of stakeholders and thus improve their portfolios, she said.

“The diversification of their investor base is something international GPs are always thinking about,” Ambrose said. “There’s demand and willingness from Mexican pension funds as well. They’re looking to grow their sophistication around their investments and how to select managers. They were the first ones that wanted to invest internationally. They’ve been very welcoming to large international private equity firms.”

A source familiar with the local investing market said BlackRock CEO Larry Fink helped open doors for CerPIs by working in recent years to build relationships with Mexico pension funds. BlackRock declined comment.

In an investor presentation contained in Blackstone’s CerPI filing, the asset manager said the fund will allow long-term capital investors the opportunity to “make investments as a limited partner… in one or more Blackstone funds.”

The fund will also have the capability to invest in “activities or projects in Mexico” according to the presentation. 

Through its Fisterra portfolio company, Blackstone has invested in the 252MW Ventika wind farm, which it sold to IEnova in December 2016, and the 526MW Frontera Export power plant (Lonestar), which sells energy to Mexico from Texas.

The company has also invested in the 875MW Tierra Mojada closed-cycle generation plant in Guadalajara.  

Blackstone’s flagship USD 40bn infrastructure fund, Blackstone Infrastructure Partners, is currently fundraising. It will invest in energy, transport, telecoms and water projects, according to the presentation. 

The BX Mexico Advisors preliminary prospectus does not include details on the size of the fund, but the lifespan is set at 50 years. 

Blackstone’s fund is working with Alfaro, Dávila y Scherer as structuring agent, Merrill Lynch México as placement agent, Creel, García-Cuéllar, Aiza y Enríquez as the legal and tax advisor. CIBanco is listed as trust bank and Monex Casa de Bolsa as the common representative. 

EIG Global Energy México said it would target a 4Q18 launch for its CerPI fund, according to an investor presentation. 

Like other CerPIs, the fund will invest 90% of the maximum issuance in EIG’s Fund XVII through LP commitments and the remaining minimum 10% in Mexican energy projects. 

The fund will be administered by Tito Vidaurri, director of EIG México. He has 23 years of banking experience with Bank of America Merrill Lynch, Deutsche Bank, Morgan Stanley and Credit Suisse. The fund will also be a 50-year vehicle and is targeting net returns of 13%-15% in USD.

EIG’s fund is working with Barclays Capital Casa de Bolsa, Grupo Financiero Barclays México and Morgan Stanley México as placement agents. Creel, García-Cuéllar, Aiza y Enríquez is serving as the legal and tax advisor. Mijares Angoitia Cortes y Fuentes is the legal advisor to the placement agents. CIBanco is listed as trust bank and Monex Casa de Bolsa as the common representative.

Lexington Partners is proposing a secondary fund that will invest in capital funds. 

The fund will target buyout, venture capital and mezzanine funds as well as including a compartment for energy and infrastructure funds. 

Lexington Partners’ fund is working with 414 Estructuración (C4P1T4L) as structuring agent, Casa de Bolsa Credit Suisse and Grupo Financiero Credit Suisse as placement agents, Creel, García-Cuéllar, Aiza y Enríquez as the legal and tax advisor. CIBanco is again listed as trust bank and Monex Casa de Bolsa as the common representative.

The Partners Group Cayman Management IV fund will invest globally in or with Partners Group vehicles, as well as select investments in Mexican activities and projects. 

It will focus on private real estate, private infrastructure and private debt opportunities. 

The fund is targeting direct investments (40-70%), secondary investments (20-50%), and primary investments (10-30%). The fund’s investments will be located in North America (15-60), Europe (15-60%); and Asia/rest of the world (10-40%, with at least 10% in Mexico).

Partners Group’s fund is working with Barclays Capital Casa de Bolsa and Grupo Financiero Barclays México as placement agents, Creel, García-Cuéllar, Aiza y Enríquez as the legal and tax advisor and PwC as the external auditor. CIBanco is again listed as trust bank and Monex Casa de Bolsa as the common representative.

 

CerPI