Of a total of 114 CKDs that have been issued since 2009 to date, 80 have been capital calls, 29 pre-funded and 5 direct investments in the 11-year life of the CKDs.
The resources committed to the CKDs with capital calls amount to 16.468 million dollars (md), which represents 75% of the total (80 CKDs), 4.708 million dollars were in pre-funded instruments (22%) and 721 md in direct investments (3%). In total, the 114 CKDs have committed capital of 21.897 md, while the CERPIs 8.426 million dollars as of June 30.
The initial mechanism of the CKDs at its birth in 2009 was pre-funding. In mid-2012, CKDs began to be seen with capital calls, as is the international practice in private capital. The pre-funding stopped the development of the CKDs in the beginning since only those projects that were visualized that could overcome the negative carry were those that were placed, so when the capital calls began, this asset class began to have a higher dynamism.
According to estimates by Homero Elizondo, an expert in CKDs and CERPIs, he considers that the cost of pre-funded CKDs is between 300 and 500 basis points depending on the speed at which the administrator (GP) manages to invest the amount committed by the investors. This without considering the issuance, legal and operational expenses among others.
Of the 29 pre-funded CKDs, 22 were issued between 2009 and 2012 and 7 between 2014 and 2016.
Since 2016, the appearance of joint venture CKDs has been seen, where resources are channeled to specific projects that in many cases are already pre-funded because the money is used immediately.
Of the 29 pre-funded CKDs, two closed the cycle during 2020. Four CKDs have generated an IRR greater than 10% and five have until June 2020 an IRR between 8% and 9%. The real result will be obtained when each CKD concludes its divestment cycle.
Regarding the expiration dates of the pre-funded: 6 pre-funded expire in 2020 (2 have already expired); 8 in 2021 and 15 will expire between 2024 and 2040. As the pre-funded CKDs expire, it will be possible to see if their IRRs were competitive.
Columna de Arturo Hanono