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These companies see myriad opportunities to catalyze further investment in Mexico and support the local economy given the various avenues available.

Sebastian Miralles

Managing Partner, Tempest Capital

We are witnessing the world transition from a globalized economy focused on supply chain efficiency to a multipolar world with a pressing need for supply chain security. The new paradigm is the ability to control and secure critical resources. Mexico could see USD150-170 billion of additional FDI coming in annually for at least the next decade. This has a multiplier effect of 10, which translates to a net incremental impact of around USD1.7 trillion on the Mexican GDP over the next decade. We could even add another 150 basis points or even more for the next decade if local pensions funds redirect investments internally. We have been long-term believers in the country, and our idea is to take advantage of the situation. We are currently laser focused on identifying what we call the first, second and third derivatives, namely the sectors and subregions that will first benefit from the opportunity. We want to be positioned right before the wave of capital investments.

Harry Krensky

Managing Partner, Discovery Americas

The private equity market in Mexico has faced significant challenges over the past 15 years due to a complex macroeconomic environment and a stagnant public equity market that yielded minimal returns, almost close to 0%. Despite these obstacles, our firm has emerged as a standout performer in this challenging landscape. As we celebrate our 20th anniversary in 2023, it is worth noting that very few other firms have achieved notable success in this environment. Throughout these two decades, the average private equity fund in Mexico has only managed to generate a modest average return of approximately 1%. However, Discovery has consistently outperformed the market with our portfolio companies boasting an impressive average return of close to 20%. We are not simply investors, but also entrepreneurs with a track record of launching and successfully operating multiple companies. Our approach begins with a thorough analysis of opportunities for launching and managing businesses. What sets us apart is our hands-on involvement in our portfolio companies, actively engaging and contributing to their success.

Rebeca Pizano

Managing Director, Vector Partners

In Mexico, the penetration of total debt as a percentage of private sector GDP is lower than in other Latam countries. There are some 40,000 medium-sized companies that lack access to permanent sources of financing. Considering the low participation of bank credit, we saw a great opportunity to attend those companies that need to strengthen their structure with capital injection or customized financing. Vector Partners is a debt investment fund manager that placed Mezzanine Mexico Uno (MMU), its first fund was aimed at the Mexican market investing in private debt, in 2016. We work with companies to analyze their finances and strengths and prepare them for becoming a corporation. This is a tailor-made loan that incorporates governance practices. Regardless of the loan size, we conduct a thorough credit analysis focusing on growth potential rather than past performance. Vector Mezzanine debt is about growth. It is a long-term loan with a grace period that allows a company to invest while waiting for the project to take off.

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