Mexico Private Equity Fund Homepage

An Investment Fund

The Mexico Private Equity Fund provides development and expansion capital to successful companies with growth potential in Mexico. Investments are made primarily in small to mid-sized firms that manufacture or process products directly for export, and in companies that supply components or services to maquiladoras and other export manufacturers in Mexico (indirect exporters).

Established in 1997, the Fund has a total capitalization of approximately $26 million. It is structured as a closed-end investment company listed on the Bermuda Stock Exchange. Initial shareholders include US, Canadian and British investment funds managed by City of London Investment Management Ltd.; the InterAmerican Investment Corporation (an affiliate of the InterAmerican Development Bank); Nacional Financiera (the Mexican National Development Bank); the Equity Fund of Latin America; and the University of Richmond, Virginia.

Investments range in size from a minimum of $500,000 to a maximum of $2.6 million (10% of the capital of the Fund) in any one company - although the Fund can join together with other investment institutions to participate in larger transactions. While investment structure is flexible, most commitments are made in equity or equity-related securities, with a target investment time horizon of three to five years.

Investment Objectives and Strategy

The Fund's objectives are to promote the development of export industries in Mexico and to obtain attractive returns for its shareholders. These goals can only be achieved through the growth and success of the companies in which the Fund invests.

Investments will be concentrated in Mexican companies that are developing or expanding manufacturing or processing businesses which serve proven export markets. Equally important are companies that provide key components or services to maquiladoras or other Mexican export manufacturers as a substitute for imports.

Both Mexican and foreign-owned companies are appropriate target investments, including firms domiciled outside of Mexico that are moving production to Mexico in order to reduce costs and increase productivity and efficiency.

Geographic Focus

While the Fund does not have an exclusive geographic focus, emphasis is placed on business opportunities that are located in, or contribute to the development of, the Northwestern States of Mexico: Baja California, Sonora, Chihuahua, and Sinaloa. This region of the country has experienced strong export-driven growth, and there is great demand for capital to finance new business opportunities.