Of the 114 CKDs that exist, 19 achieve an IRR greater than 10% net in pesos, while of the 32 CERPIs there are only 11 have an IRR greater than 10 percent. Together, it means that 21% of CKDs have IRRs greater than 10%, where 17% correspond to CKDs and 34% to CERPIs. These results are those we have, considering capital calls and distributions at the end of May 2020.
These numbers are explained by the corresponding valuations where many of them, being valued in dollars, reflect the movement in the peso dollar exchange rate. As CKDs and CERPIs are private equity vehicles listed on the Mexican stock exchanges (BMV and BIVA), these gains are only book gains at the date of the analysis.
Of the $29,653 million dollars of committed capital, 74% are CKDs and 26% are CERPIs. The market value is $11,353 million dollars. For CKDs, the figures show that 70% of resources have been called while for CERPIs they barely reach 24%, so capital calls will change IRRs, just as distributions do.
When reviewing the CKDs (private equity funds listed on the stock market that invest in Mexico) in amount and number, the real estate, infrastructure, energy, private equity and debt sectors stand out.
With an IRR greater than 10% in pesos, the real estate, private equity and infrastructure sectors stand out with the highest number of CKDs. In the real estate CKDs (7), those of IGS (3), FINSA (1), FINSA / Walton (1), Artha (1) and Alignmex (1) stand out. Private equity (4) includes IGNIA (1), Dalus (1), Northgate (1) and ACON (1). In the Infrastructure CKDs (3) those of RCO (1), GBM Infrastructure (1), as well as Infrastructure Mexico (1) stand out.
With the lowest number of CKDs with IRR greater than 10% in the energy sector (2) is one of BlackRock (1) and Artha Energía (1). Altum (2) is in the credit sector and PMIC Latam (1) is in the fund fund sector.
Among the 32 CERPIs with an IRR higher than 10% are those of the fund of funds sector and those of private equity. Of the 21 CERPIs in the fund of funds sector, 10 of them have an IRR of more than 10% where those of BlackRock (8), Lexington Partners (1) and Blackstone (1) stand out. Among the 6 private equity funds, Glisco Discovery stands out. It is important to mention that the vast majority of these have barely called capital by 20% and the ones that have been the most are Lexington and Glisco Discovery (33 and 30% respectively).
The two CKDs that have amortized so far (AMB Capital and Promecap) neither achieved an IRR higher than 10% net for the investor in pesos. Both CKDs were born in 2010. A total of six additional CKDs to these two will expire in the coming months where only in three cases their IRR is between 8 and 9%. These IRRs will continue to change with the independent quarterly valuations made by CKDs and CERPIs.
Column by Arturo Hanono
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