The Business Year

By providing various financing solutions, investment companies help high-growth firms expand and reach their full potential.

Bernardo Paasche

Founding Partner, Capital Indigo

SMEs are a large segment that has been underserved by the formal financial industry for decades. This problem is more acute in Mexico. It is harder for SMEs to raise long-term capital, as lending institutions have to invest time and resources in analyzing each company and they prefer to invest this time on large-scale projects that can reap higher levels of revenue. SMEs sit at an uncomfortable middle point, where they require nearly the same level of analysis as a large corporate but are too small for many banks. We started Capital Indigo with the goal of serving SMEs. We have highly qualified people serving and analyzing SMEs’ long-term plans in great detail, which is rare within traditional banks. We offer a different approach, which the market is reacting well to. We have two separate funds in Capital Indigo. When we invest in equity, we seek high-growth companies. However, when we are playing on the liability side of the business, it is more about stability rather than growth.

Alexander Rossi

Managing Partner, LIV Capital

Many companies in Mexico, particularly medium-sized ones, still lack access to capital. Traditional financing is oriented to larger companies that can offer stronger financial statements or guarantees that can support credit. LIV Capital focuses on high-growth companies that need capital to expand and venture into new regions, acquire competitors, or launch a new business line. When we partner with a company, we collaborate from investing until exit, exploring and understanding its market needs, paying attention to the strategic side of our investments to boost company’s full potential. To invest, we both need to share the same vision on how the company can best grow. We participated in a healthcare deal and see attractive fundamental growth opportunities in that sector. Also, we invested in the Bolsa Institucional de Valores (BIVA) and Cencor because we saw a great opportunity to break the monopoly of the Mexican Stock Exchange over the past 120 years.

Carlos Lomelí­

DIRECTOR General, Carlos Lomelí­

While there are many people who earn a fixed income in the country, its common that couples seek to combine their incomes for access to finance. ION Financiera addresses this issue by increasing our understanding of how families and individuals have changed the way they support themselves and how this changes their ability to meet payments. For individual mortgages, we analyze the different income sources provided by the families and/or individuals, certify where they work or visit their businesses. For urban developers, we conduct a full analysis of the project, the market and for sure the incumbent knowledge of the market and the product that is meant to produce. Housing developers have a tremendous opportunity building houses in urban areas that are well connected to public transportation. We provide financial services to the market through two main business lines: bridge loans to urban mid-sized developers and individual mortgages for families in Mexico.

Carlos Vallebueno

Many financial problems can be solved through investment rather than banking, especially after the new capital rules of Basel III. Given that the size of the financial industry in Mexico is still fairly fragmented, there is a great opportunity to provide better intermediation services thorough the asset management and capital markets industries. The country has USD125 billion in mutual funds, USD160 billion in Afores, and banks that are worth USD400 billion. Together with the assets of other securities managed abroad, the asset management industry in Mexico has a greater value than in the banking industry, though it is extremely fragmented. One solution is to find ways to improve pension funds solutions to look into long-term financial assets that would then create financial opportunities by investing it in infrastructure and social work. There is a great opportunity in long-term intermediation within the financial industry. We see this opportunity in Mexico as well as in many other Latin American countries.

Gustavo Lozano

Country Manager, Amundi Asset Management (México)

The group sees the region as a strong base for internal savings growth. Similarly, Mexico’s pension fund system and mutual fund areas will increase their assets. The potential of the Latin American region can only perhaps be compared to Asia. That is the reason Amundi is making a strong effort to set a firm footprint in the region. We have been making strong successes over the past five years in the institutional client front. We were able to offer and implement actively managed strategies for a few pension funds. Moreover, the company has a few additional projects with mutual funds. Other than that, Amundi has been searching for additional local businesses. The local industry is young and in the early stages of development, and numerous groups are eager to go into international partnerships that can offer management for external portfolios. It is a unique opportunity for a group like Amundi to not only have assets sourced from Mexico, but also to provide training and knowledge transfer and play an advisory role.

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