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We are all part of a globalized society, and so I find immense value in being part of an international professional body like CAIA.
Felipe BoteroDirector of Investment Management at Yellowstone Capital Partners
Could you give us an overview of your current role and responsibilities?
In 2021 I joined Yellowstone Capital Partners (YCP), a pioneering Pan-American Colombia and US-based private equity real estate firm. YCP is focused on developing large-scale sustainable residential and mixed-use communities, with over $630mn AUM across three active funds. Currently, YCP manages capital from 150+ LPs, including all private pension plans in Colombia, as well as the leading insurance companies, endowments and foundations, and family offices.
As the Director of Investment Management, together with a team of investment professionals I am responsible for overseeing $430mn AUM for our Colombia-focused funds. I also lead all the initiatives related to the due diligence, capital deployment, monitoring, and disposition of the assets that are part of these funds.
To date, we have invested in 10 large-scale residential projects with 25,500+ units currently being developed (+60% low-income housing), as well as 3 mixed-use landmark projects with a total GLA of 250,000 sq. m. Additionally, I lead the investor relations efforts and co-manage the day-to-day interactions with Yellowstone’s strategic co-investors, developers, operating partners, and third-party valuators, amongst others.
Together with other senior members of the GP, I’m currently co-leading the fundraising efforts of our Fund IV focused on Colombia (target size: USD $420mn), which replicates the proven investment strategy implemented by its predecessor funds during the last 14+ years.
How did you first learn about the alternatives industry?
I started my career in JPMorgan’s Sales & Trading desk in Colombia back in 2011, serving the largest institutional and corporate investors in the country. After two years in this role, I transferred to JPMorgan’s Asset Management division in Colombia and then to New York, advising ultra-high net worth families in the design, construction, and monitoring of their traditional and alternative investments global portfolios.
Given the relevance of alternative investments in the strategic asset allocation of this type of investor, during my three-year tenure at this division I had to interact very closely with JPMorgan’s alternative investments platform. This was one of the largest of its kind at that time, and it gave investors access to third-party household managers spanning hedge funds, private equity, debt, and real assets.
How has your career in alternatives evolved over time? And where do you see yourself in future?
After a 5-year tenure in JPMorgan, in 2016 I joined ROAM Capital – one of the leading placement agents in LatAm – as the Head of Research. I was responsible for identifying and performing due diligence on “best of breed” alternative investments managers across varying private market strategies, as well as monitoring and benchmarking all GPs/funds within ROAM Capital’s platform. I also spearheaded the firm’s private market research efforts, and was significantly involved with fundraising together with the Managing Partner.
Since joining YCP in 2021, I envision myself working at the firm for many more years in order to continue to be part of the construction and growth of the alternatives industry in Colombia.
Is there a difference between working in alternatives in New York and Colombia?
I think that there are more similarities than differences, especially given that the benefits of alternative investments in portfolio construction and strategic asset allocation have become so well-known. Both institutional and ultra-high net worth investors around the globe have substantially increased their allocations to alternative investments, and they are now highly educated about the industry as a whole.
In Colombia specifically, sophisticated institutional LPs have been investing in alternatives for more than a decade – both in international and local GPs, and across practically all asset classes.
Has Preqin helped you during your career? If so, how?
In my opinion, Preqin has become the leading research and data provider in the alternatives industry. During my tenure at ROAM Capital, I used the platform frequently, and it was fundamental to accomplish most of my responsibilities.
I am a great fan of Preqin’s periodic research reports, which I believe are quite robust and offer powerful insights into the state of the industry and its underlying asset classes. Preqin is also widely used by the LatAm institutional LP base, so you need to be well-familiarized with the platform to stay in sync with this audience.
What advice would you give to someone looking to build a career in alternative investments?
Given the complexity and long-term nature of alternative investments, I believe that people looking to build a successful career in the industry need to have a very different mindset than individuals working in the public markets (i.e., traders). Great milestones and true alpha can be accomplished, but it takes time, patience, discipline, and some setbacks along the way.
To complement my own experience in alternatives, in 2020 I obtained the CAIA Charter designation, which is one of the most robust and respected academic programs in the industry. The program provided me with a great deal of information in the form of all the latest academic and theoretical insights, and I’m glad to say that I’ve already applied many of the concepts I learned in my day-to-day work.
On the educational front, it’s not common for undergrad university programs to formally include alternative investments as a subject itself. So, if you are interested in learning about alternatives early on in your career – the best possible path you could follow is the CAIA Charter program.
What is it like to be a member of CAIA? Could you go into more detail about the Charter program itself?
In 2022, CAIA launched its Chapter for Latin America, which I am a member of together with other investment professionals in the region. The main objective of CAIA’s Chapters is to promote awareness, education, and best practices for the alternative investments industry, as well as to connect investment professionals all over the world.
We are all part of a globalized society, and so I find immense value in being part of an international professional body like CAIA. As economic theories and industry practices have become globally interconnected and standardized, we have reached a point where everyone can share ideas in the same financial language.
Regarding the Charter program itself, I would say that it’s very well structured and rich in academic content while providing powerful and useful insights into the industry’s real day-to-day dynamics. As is the case with similar programs, the CAIA designation requires a lot of time, self-discipline, and sacrifice, but it’s definitely achievable and worthwhile.
YCP is a pioneering Pan-American Colombia and US-based private equity real estate firm, with over USD $630 million in AUM across three active funds in Colombia and in the US, managed by 29 investment professionals. YCP’s investment strategy for its Colombian based funds is focused mainly on developing large-scale residential sustainable communities, targeting the country’s emerging working and middle classes. Through its US venture, YCP seeks to invest in real estate housing opportunities across the US, following a liquidity and capital preservation driven private debt strategy. Currently, YCP manages capital from +150 LPs, including all the Colombian private pension plans, as well as the leading insurance companies, endowments & foundations and family offices. In 2020, YCP was the first Colombian private equity real estate GP to become a signatory of the Principles of Responsible Investment (PRI).