CKDs exposure in Afores grew 26% in 2015, to the equivalent of US$8.6 billion, which represents almost 6% of the Afore’s assets under management. CKDs are the vehicle by which the Afores can invest in private equity. Regulatory limits for this kind of investment still allow the Afores to increase their positions more than two fold to almost 18% of Assets Under Management.
According to Capital 414, firm that provides service and corporate financial consulting, during 2015 about US$1 billion through 19 issues, went to market. This figure represents almost double the issuances observed over the previous year and represents the third best year in issuances since their inception in 2008. In 2010 about US$1.2 billion were issued and in 2012, US$1.4 billion. Capital 414 states that there are close to US$1.9 billion dollars in the pipeline.
Through investment in CKDs, Afores have financed a growing range of projects and companies. According to Consar, 32% of CKDs available invest in Real Estate (Malls, Retail/office, properties, Housing); 29% in Infrastructure (Hospitals, Universities, Highways, Airports, Logistic platforms); 24% other Private Equity (E-commerce, Health Industry, Touristic services, Food and restaurants); 7% in Financial Assets (Subordinated/ Mezzanine/ Convertible Loans, Loan Portfolios); 5% are Forest Projects (Development and commercialization of plants and wood in Campeche) and only 3% is allocated to Energy (hydroelectric power stations Oil platforms). Given the resource requirements in sectors such as Infrastructure and Energy it is expected to see higher issues in these sectors during the coming years.
At the end of 2015 the Afores with higher investments in CKDs were Afore Banamex with nearly US$2 billion; Sura and XXI Banorte with US$1.6 billion each; while Profuturo and PensionISSSTE had US$833 and US$667 million each. These six Afores account for 78% of total holdings in these securities, according to firm Capital 414.
With investments between US$300 and US$600 million dollars are Invercap with US$556 million dollars; Principal with US$444 million dollars; Inbursa with US$333 million dollars and Coppel with US$278 million. The two Afores with fewer investments in CKD’s are Metlife and Azteca with US$167 and US$56 million dollar respectively.
The participation of Afores in this type of instrument means a great responsibility in terms of selection and diversification, hence the importance that the CONSAR has given to these investments which not only require a thorough analysis, but also approval of the independent member of the investment committee.