The year of 2019 ended with an issue of 13 CERPIs and 5 CKDs. The committed capital placed in 2019 amounted to 2.39 billion dollars of which 28% (659 million) have been called. The amount placed in CERPIs was 84%, while in CKDs it was 16% showing interest in diversifying global institutional investors in Mexico. This appetite for CERPIs could continue in 2020. Own estimates project that in 2020 commitments could be placed for 2 billion dollars.
The placement of 18 CKDs and CERPIs in 2019 is within the range of issuance that were made in 2015, 2016 and 2017 where they were placed 19, 14 and 15 respectively, although it means almost half of the 38 issuance that were made in 2018 (20 CKDs and 18 CERPIs). This record was because of the change in CERPIs that allows global investment in private capital.
In CERPIs the committed capital was 2.01 billion through 13 new funds. 11 funds of funds were placed, where the issuers were in order of importance: Harbourvest, Blackstone, Actis Gestor, Lexington Partners and Blackrock; there was also one of private capital (Spruceview) and another of energy (Mexico Infrastructure Partners).
Regarding CKDs, the committed capital was 383 md through 5 new funds in 2019. Two issues of mezzanine debt were placed (both from Altum Capital), one from real estate (Walton Street Capital), one from private equity (ACON) and another of energy (Thermion Energy).
The main issuer was Harbourvest Partners with a CERPI of 870 million dollars in committed capital, while in number of issues Blackrock placed 7 CERPIs in December which together add commitments for 199 million dollars.
The 144 CKDs and CERPIs signify commitments for 25.525 billion of which 76% are issues of 112 CKDs and 24% to 32 CERPIs. Of this amount 54% has been called.
In 2018, 18 CERPIS were placed, which meant commitments for 3.92 billion, while in 2019 there were 13 and the amount committed was 2.01 million dollars.
Currently, the investments in local (CKDs) and global (CERPIs) private equity is 6% of the assets under management of the AFOREs at the end of December and in resources to call is an additional 5%.
Given the amounts placed in 2018 (3.917 billion) and 2019 (2.011 billion), reaching 2.000 billion in 2020 is achievable. This amount would be calling 400 million dollars aprox (20%) that for the 211.917 billion in assets under management of the AFOREs at the end of December would mean 0.2%.
Arturo Hanono is an institutional asset manager in Mexico. He has more than 30 year's experience in the Asset Management world, of which 15 he spent as a private banker and in the last 18 years has been CIO in several Afores. He has a degree in Economics from Universidad Anáhuac (1983). For his professional thesis, he won first place in the National Stock Market Prize organized by the Mexican Stock Exchange in 1985.
You can find him at email@example.com