MEXICO CCDs: Expanding Opportunity

Sep 1, 2010

A wave of new CCDs is making its way to the Mexican market. Size and the diversity of underlying assets are slowly increasing.



by Ben Miller

After a pause of several months, a new round of certificado de capital de desarrollo (CCD) was gearing up to hit Mexico’s local market. The asset class, barely a year old, is still gathering momentum as a means for the country’s pension funds to invest in infrastructure and medium-size businesses via private equity (PE).

Two deals that wrapped up at the end of July diversify the market’s offerings to include real estate and high-yield debt in the equity-like asset class that is sold in the debt market. The tradeable certificates offer equity participation in the business plan of the issuer, which can be a company, but is usually a fund.

Buyers are typically Afores, or pension funds, and other large institutional investors. Afores have pooled resources to study the deals individually, which takes months, owed to the novelty of the asset class.

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management