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Central America-Focused Private Equity Fundraising, 2005 – Q2 2015

by Allison Polchinski

  • 13 Jul 2015
  • PE

Preqin’s Funds in Market online service currently tracks 11 funds focused solely on investments in Central America that are on the fundraising trail, seeking a combined $800mn in aggregate capital. Fundraising for this region has remained relatively steady over the past decade, with 2012 seeing both the largest number of funds closed and largest amount of capital raised. In 2012, 10 funds held a final close, raising an aggregate $1.8bn, slightly above the $1.6bn collected in 2007 from just eight vehicles. Since 2012 however, only 13 funds focusing solely on the region have reached a final close, with just $400mn raised so far this year. 

Real estate is the most common fund strategy for solely Central America-focused funds, with 25% of all funds closed in the past 10 years falling into this fund type, as shown in the chart above. Over the past decade, 15 real estate funds reached a final close, raising just over $4bn in aggregate capital. During the same period there have been only six buyout funds to hold a final close, collecting almost $640mn in aggregate capital. This is only slightly more than the $500mn raised by 13 venture capital funds focusing solely on Central America, possibly highlighting that the region lacks the more attractive and mature companies seen in other locations with more developed markets.

The 10 largest private equity funds closed since 2005 with a sole focus on Central America primarily include infrastructure and real estate vehicles, with all but three funds pertaining to one of these two fund types. The largest fund not to fall into either of these categories is Nexxus Capital Private Equity Fund VI, which closed on $550mn in 2013; the fund employs a growth strategy and invests exclusively in companies based in Mexico.

Solely Central America-focused fundraising looks set to continue at a similar level to what we have seen recently, according to Preqin data for funds in market. Of the 11 funds currently in market, vehicles with a growth strategy make up the majority of those targeting the region (27%), while there are surprisingly no real estate or buyout funds on the road with a sole focus on Central America. The largest fund currently raising capital is Central American Mezzanine Infrastructure Fund II, which is looking to accumulate $250mn to invest in infrastructure. 

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