{"id":93096,"date":"2023-11-29T15:02:00","date_gmt":"2023-11-29T14:02:00","guid":{"rendered":"https:\/\/efecomunica.efe.com\/?p=93096"},"modified":"2023-11-29T16:54:21","modified_gmt":"2023-11-29T15:54:21","slug":"private-capital-aum-in-mexico-sees-decade-of-steady-growth","status":"publish","type":"post","link":"https:\/\/efecomunica.efe.com\/en\/private-capital-aum-in-mexico-sees-decade-of-steady-growth\/","title":{"rendered":"Private capital AUM in Mexico sees decade of steady growth \u2013 Preqin reports"},"content":{"rendered":"
Statement issued by the company (Announcement)<\/span><\/div>\n

Infrastructure AUM builds onwards and upwards in 2022, reaching $8.2bn in total<\/h3>\n
\n

Today Preqin<\/a>, the global leader in alternative assets data<\/strong>, tools, and insights, published its Preqin Territory Guide: Private Capital in Mexico 2023<\/a><\/em>\u00a0report. The report lifts the lid on the state of Mexico\u2019s alternative assets landscape. It reveals almost consistent year-on-year growth of assets under management (AUM) and dry powder in private capital asset classes* over the last 11 years, from the end of December 2011 to December end 2022. For example, private equity AUM \u2013 a combination of unrealized value and dry powder \u2013 increased six times from $1bn to $6bn, in the timescale stated above.<\/p>\n

A region showcasing steady growth in alternative assets <\/strong><\/p>\n

At the end of Q2 2023<\/strong>, total allocation of alternatives in the Latin America (LatAm) region stands at $131bn, increasing by over 30% from $100bn at the end of 2020. Mexico and Brazil, LatAm\u2019s two biggest economies, boast the largest concentration of alternative assets at a combined $57.3bn, according to Preqin\u2019s Fund Raising from Latin America: A Guide to Raising Capital <\/em>report from June 2023. While Mexico is currently the junior party to Brazil, it has shown greater momentum. Mexico\u2019s AUM growth at an annual five-year rate was 37.7% up to the end of 2020, compared to Brazil\u2019s rate of just 1.8%, over the same period.<\/p>\n

In Mexico, venture capital (VC) AUM (the combination of unrealised value and dry powder as managed for investors) fell in 2022 as a whole. It totaled $1bn for the year, compared to $1.7bn in 2021. That said, this fall aligns with the wider downward trend in VC AUM by country seen globally. While Mexico is relatively small compared to other LatAm countries** when it comes to alternative assets AUM and dry powder, there are strong foundations being set. This is not only through capital injections and investment, but through regulatory change and key business-inducing initiatives (see below).<\/p>\n

Key growth drivers: private equity and infrastructure<\/h2>\n

Private equity AUM in Mexico<\/strong> reached $6bn by the end of 2022, compared to $4.2bn by the end of 2021. But it is infrastructure investment that is a key growth area in Mexico. Infrastructure AUM in Mexico reached $8.2bn by the end of 2022, compared to $5.2bn by the end of 2021. Mexico’s economy is maturing as it realizes the potential of connecting private asset investment to national growth \u2013 in which private equity and infrastructure are key.<\/p>\n

In addition, the opening up of Mexican pension capital to alternative assets investment through AFOREs (authorized pension fund managers) \u2013 and importantly to national projects for economic development \u2013 has shown institutional investors globally that the economy is maturing. From a global perspective, Mexican financial regulatory changes in 2018 allowed international private equity firms to access Mexican pension funds. Since, BlackRock, Apollo, Blackstone and KKR have closed Investment Trust Certificates (CERPIs), securities listed on the Mexican Stock Exchange. This has aided the flow of Mexican pension capital into a range of projects across real estate, infrastructure and private equity.<\/p>\n

David Dawkins, lead author of the report, at Preqin says,<\/strong>\u201c<\/em>Mexico is continuing to evolve as a regional hub for alternatives with its own pockets of value, local expertise and opportunity. A growing number of Mexican policymakers clearly see the benefits for public money and economic growth by investing in alternatives \u2013 in particular national projects and infrastructure. As consistent growth in AUM and dry powder across almost all private asset classes continues, more investors will be considering the country as a key regional hub.\u201d <\/em><\/p>\n

Additional key findings from Preqin\u2019s\u00a0Private Capital in Mexico 2023 report include:<\/strong><\/p>\n