Ainda CEO outlines second fund’s Latin American expansion plans

Interview 19 August

Ainda CEO outlines second fund’s Latin American expansion plans

Mexico-based fund manager Ainda, Energía & Infraestructura (Ainda) is seeking up to USD 600m for its second infrastructure fund, which will be focused on investing across Latin America.  

CEO Manuel Rodríguez Arregui told Infralogic that the asset manager will target investments in the Pacific Alliance: Mexico and Colombia initially, before expanding to Chile, Peru and possibly other Latin American countries.  

Ainda is working on the structuring of the fund with Ritch Mueller in Mexico and Actinver as financial advisor and brokerage to place the Mexican portion of the fund.  

Like its 2018 fund, a Mexican CKD (Project Development Certificates) vehicle listed on the BMV as Ainda Energía & Infraestructura (AINDACK18), the second fund will be a 15-year investment vehicle, also listed on the BMV.  

The fundraising will not take place exclusively in Mexico. Although Ainda will raise funds principally through a CERPI fund, a Mexican stock exchange-listed vehicle that allows funds raised in the domestic market to be invested in other Latin American countries, parallel vehicles seeking funds will also seek funds from Mexico, Colombia and international investors.  

Ainda is working with the BMV to design an ESG-focused fund, Rodríguez said, having studied similar ESG regulation in other jurisdictions.

Rodríguez said that the fund is targeting USD 600m for the fund, with USD 350m from Mexico, USD 150m coming from Colombia and USD 100m from elsewhere in the world.  

Ainda is in the process of finishing the beauty contest to select an international placement agent, he said.    

The new vehicle will target investments in the transportation, mobility, water and oil & gas sectors, where there are significant opportunities in projects where Ainda can add value, according to Rodríguez.  

Ainda is not hot on social infrastructure, as IFRS16 was introduced in 2019 and Rodríguez considers that the present value of the take or pay contracts works out higher than if government entities were to borrow and construct those projects as public works. 

Regarding telecoms, despite having devoted a lot of time to that sector in his career, Rodríguez said that Ainda would not be targeting telco investments because it implies technological change at a rate that makes cashflows less predictable.

First fund

or its first fund, which is now fully invested, the Ainda team analyzed 95 transactions across the Mexican energy and infrastructure sectors. Rodríguez said that Ainda analyzed 29 of those projects in detail and received authorization from the board to carry out ten investments, finally investing in five.  

The first fund holds a stake in the Arriaga-Ocozocoautla and Tuxtla Gutiérrez-San Cristóbal de las Casas Highways alongside Spain’s Grupo Aldesa, a 20% stake in the Monterrey - Nuevo Laredo Highway (La Gloria - San Fernando Section) alongside Promotora y Operadora de Infraestructura (PINFRA), a stake in the Hokchi Block Onshore and Offshore project’s funding, an investment in smart mobility platform Neology and a stake in the 220 MW Jaguar three-project solar portfolio, which it acquired from InfraRed and Invex in April 2022.   

Ainda will return approximately 21% in pesos and 19% in dollars to its investors, Rodríguez said.  

Ainda could make follow on investments via the new fund in some of the projects previously analyzed for the first fund, given that Ainda has already carried out detailed due diligence and in some cases established conditions that had to be met with current sponsors, he added.  

For one of its investment projects, Ainda has an option to increase its participation. If they can hold a first close before December, that would facilitate the investment in the project, Rodríguez said, without specifying which project is under consideration. 

Of its investments, Ainda is excited about Neology, a company that Rodríguez says will change how toll roads, police forces and urbanization in general operates. “In the city of Copenhagen, Denmark, all  urban technology is from Neology,” he said. “The LA or NY police departments use Neology technology in their work, with the systems it provides recognizing vehicles around police cars, informing the officers about any linked infractions. Fifteen hundred police forces use Neology’s technology, but none yet in LatAm.”     

Ainda is committed to never do things that aren’t to the benefit of its counterparties, Rodríguez said, citing the example of some renewables projects that have been developed in isolated areas that do not connect well to local grids. “You should do renewables projects in a region where it adds value to everybody,” he said.  

Another example of the company’s management style he said he was trying to implement was using better revenue management strategies on assets such as toll roads. “The reality is that on the business side, we have not been sophisticated when it comes to revenue management,” Rodríguez said. “If you cannot store capacity and have heterogenous elasticities, then you should do price discrimination — charging the same service at different prices. The creation of value is when you can charge differently, asking which algorithms are powerful. On the London Underground they sell a monthly pass and frequent users have different elasticity from a one-off user.”  

Rodríguez explained that founding Ainda as a partnership guarantees its capacity to attract, develop and retain talent. As a relevant example he points out how the influx of international law firms in recent years prompted more Latin America-based firms to adopt a partnership model and wanted to replicate this paradigm for Ainda. "In LatAm, there isn’t in the DNA of companies a partnership model,” he said.  

Since raising fund one, the senior management team has doubled, he said, highlighting the incorporation of Juan Carlos Echeverry Garzón, Tessy Rivera Cervera, María Fernanda Casanueva de Diego and Andrés Castillo Arce as Partners. 

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