Exclusive: Macquarie mulls Latin American fund

The A$427bn asset manager intends to use its presence in Mexico as a stepping stone to venture further south.

Macquarie Group, the Sydney-based fund manager, is in the early stages of setting up an investment structure covering major Latin American economies.

Speaking at an investor forum held in the Australian capital, Shemara Wikramanayake, head of Macquarie Funds, underscored the firm’s growing interest in Latin America and said Macquarie was currently in talks with local partners to gain a foothold in the region’s key markets.

A source with knowledge of the process told Infrastructure Investor that no definitive decision had been taken as to what structure would be chosen to scout for deal opportunities in the region.

No fund incorporation documents had yet been created, the source said, adding that the potential launch of a Latin American vehicle would not happen before at least a couple of months had passed, and perhaps not this year.

Yet, hinting that a private fund was indeed the favoured option, the source expressed confidence that such a structure would see the light of day “in the medium term” – in a bid to build on the firm’s active presence in Mexico to venture further south. Key economies targeted by the group would then include Mexico, Brazil and the Andean states. 

Macquarie declined to comment. 

The firm’s Mexican fund, launched in 2009, reached a final close in 2010 on MXN5.5 billion (€316 million; $425 million). According to Infrastructure Investor Research & Analytics, limited partners in the vehicle include the Washington-based Inter-American Development Bank and the Mexican government’s Fondo National de Infraestructura, as well as Mexican pensions Afore XXI Banorte, Profuturo GNP Afore, Afore Banamex, PensionISSSTE and Invercap Afore.

Recent deals sealed by the fund include last year’s acquisition of a 49 percent participation in a 28.8-megawatt hydropower plant for MXN465 million as well as the creation of Mexico Tower Partner, a 550-unit joint venture it established with tower operator Digital Bridge last May.

Mexico is currently in the sights of many investors following last April’s announcement of a $590 billion national infrastructure plan by the Peña Nieto administration. The government’s determination to liberalise a number of key industries – in particular the energy sector – is seen as having the potential to unlock significant deal flow in Latin America’s second-largest economy.

The region counted five out of the 10 countries singled out by Infrastructure Investor in its July 2014 “Hot Markets” report. They were Mexico, Brazil, Colombia, Peru and Chile.