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Abraaj Successfully Raises US$191m in Funds through a Mexican CKD

30 September 2015

(Press Release) Abraaj has raised MXN$4,100m (approximately US$241m) for a new Mexico-focused CKD vehicle.

  • Certificates of Development Capital (CKD) are registered and publicly listed securities on the Mexican Stock Exchange
  • Fundraising demonstrates strong interest from Mexican pension funds in private equity as an asset class
  • Abraaj-managed CKD will provide growth capital investments to Mexican mid-cap businesses

The Abraaj Group (‘Abraaj’ or the ‘Group’), a leading investor operating in global growth markets, today announced that it has closed on the issuance of MX$ 3.2 billion, equivalent to US$ 191 million, of Mexican publicly traded certificates, known as Certificados de Capital de Desarrollo or Certificates of Development Capital (‘CKD’). The CKD, which will be managed by Abraaj, has a specific mandate to invest in Mexico.

This successful fundraising strengthens Abraaj’s position in the Mexican private equity market as it enables the Group to tap domestic savings and invest them into mid-sized Mexican businesses that demonstrate robust growth capabilities and are poised for regional and international expansion. The CKD will focus on those sectors that are likely to benefit from increased private consumption and domestic demand and will also target Mexican family businesses that are seeking both growth capital and expertise to accelerate their regional or international expansion.

Target sectors that fall under the investment strategy of the CKD will include retail, FMCG, healthcare, education, logistics and financial services. The CKD intends to make its first transaction by the end of the year.

Over the past 15 years, the private equity industry in Mexico has grown significantly due to an open economy, the maturation of capital markets and improving macroeconomic fundamentals. Moreover, with an ever-growing number of Mexican businesses seeking capital and strategic partnerships to bolster growth, the opportunity for Abraaj to leverage its global platform and local connectivity in the country has never been greater.

Commenting on the closing, Miguel Olea, Partner and Regional Head for Latin America at The Abraaj Group, said: “The successful closing of the CKD is evidence of the growing confidence Mexican investors have in the private equity asset class, and in Abraaj as their fund manager of choice. Private businesses are critical to the health of the Mexican economy and they have significant need for growth capital to reach their full potential. This CKD offers a valuable bridge between those who have capital to invest and those who will benefit from putting that capital to work. We look forward to investing the CKD in high growth businesses in Mexico, where we have the ability to drive the growth agenda, to help them grow into regional players and to bring our expertise to bear in order to create long-term value for our investors and stakeholders.”

Abraaj has helped pioneer the growth and development of the private equity industry in the Pacific Alliance countries of Mexico, Colombia and Peru since 2007. The Group has mobilized US$ 350 million of capital in the region and made 14 investments in sectors as diverse as food and beverage, logistics, travel and tourism, IT and financial services. The Group has a dedicated team of 18 investment and operating professionals across three offices in Mexico, Colombia and Peru.