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FONDO

MEXICO - Finance

Carlos Caraveo

CEO, Fondo de Fondos

Bio

Carlos Caraveo holds a bachelor’s degree in mechanical engineering and a master’s degree in finance from University Anáhuac, as well as a corporate finance degree from the Kellogg School of Management. He has over 25 years of experience in corporate finance, financing, and treasury, having held progressively senior positions with Cifra S.A. de C.V., the PMI Group, and Fermaca. In 2022, Caraveo co-founded a multi-family office specializing in healthcare and education investment in Mexico. He is also an independent board member of Mexico’s biggest development bank and a private Mexican LPG company. He was appointed CEO of Fondo de Fondos in February 2023.

"Mexico has the potential to attract retirees from around the world due to its favorable living conditions and lower cost of living."
Fondo de Fondos specializes in investments in private equity, venture capital, and impact investing as part of its vision to contribute to environmental sustainability.
What types of investment does Fondo de Fondos specialize in?

We invest in three main areas: private equity, venture capital, and impact investing. In private equity, we focus on large projects in energy, renewal projects, and similar endeavors. In the beginning, it was all types of projects. When we launched our company in 2006-2007, we invested in several opportunities through funds, opting not to invest directly. The current market in the US and all over the world has low levels of liquidity, though I anticipate that to change in 2024 with more companies seeking capital. It is going to happen all over the world. This will be true in Mexico as well, though there will be some differences due to BIVA and the changes to regulations. We have been promoting these new regulations to the Ministry of Finance, though more focused on debt. Our goal is to maintain a strategic approach to our investments, ensuring a continuous cycle of entering and existing funds. Achieving successful exits is crucial, and IPOs are vital to this strategy. The Secretariat of Finance has realized that the regulations were too stringent for a medium-sized company and has acknowledged the need for reform. Mexico needs to create a more supportive ecosystem to get more companies to go to market.

As a fund, what kind of projects is Fondo de Fondos currently seeking to invest in?

Energy is a major focus, as it offers substantial returns and addresses a critical need. We do not invest in hydrocarbons but rather focus on projects such as gas to hydrogen, wind, or solar energy, for example. Our interest lies in innovative approaches that contribute to environmental sustainability. For example, we are actively looking into investing in education, particularly K-12 systems that can have a significant impact on the Mexican population’s access to education. As well, we have invested in two funds in the agribusiness. We also recognize potential areas in invest in during challenging situations; for example, in the aftermath of Hurricane Otis in Acapulco, we discussed creating a fund to facilitate investments to refurbish affected hotels or convert them into senior living facilities. We are considering the feasibility of such projects either in Acapulco or other suitable locations in line with the global aging population. Mexico has the potential to attract retirees from around the world due to its favorable living conditions and lower cost of living.

What is your medium-term vision for Fondo de Fondos?

Our vision revolves around the need to attract the next generation of leaders. We recently onboarded seven new team members, with a total headcount of 38 presently. Of those, 35% are women. We always invest in two things: systems and people. We always ensure our people are satisfied. For example, we recently introduced flexible working hours to accommodate individual needs. A team member had expressed a need for adjusted working hours due to commuting challenges, and we subsequently implemented a schedule that allowed employees to choose from various start and end times. This approach enhances both work-life balance and overall job satisfaction. We also place heavy emphasis on investing in our systems, particularly in areas such as cybersecurity. The physical workspace is also a crucial aspect of our vision.

What is your strategy for investment in the coming year?

Our strategy involves proactively engaging on the international stage with a fresh approach, innovative formulas, and an updated image. It is crucial for us to present a compelling narrative and showcase our portfolios to potential investors across various regions. Accordingly, I recently proposed allocating budget resources for such travel at our recent board meeting. Another important aspect of our strategy is to develop new generations in our team who will bring in new ideas, experience, and perspectives. This can only help us navigate international markets more effectively. Mexico holds immense opportunities, though the challenge lies in altering external perceptions and accurately portraying Mexico’s economic landscape to international investors.

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