Best Practices in PPP Financing Latin America - e-Institute - World ...

Best practices in Public-Private Partnerships financing in Latin America
of Pension Funds, provided that the payment of capital
and interests is sufficiently guaranteed, and keeping the
risk of term extension.
• Investment in the most subordinated bonds, mezzanine
debt and capital make recommendable channeling the
investment through a fund for infrastructure, where a
specialized manager carries out a more profound analysis
of investment feasibility. In this case, payment of the
management commissions is justified.
According to Pérez de Muniain, the regulation framework
for pension funds in LAC countries has opened slowly
to investments in infrastructure, directly and/or through
specialized funds. There are 20 Private Capital Funds devoted
to investment in local infrastructure in Mexico, Chile, Colombia
and Peru, managing a total amount of resources equal to
US$ 4,035 million. More than half of the resources of these
Funds correspond to investments of Local Pension Funds. The
20 Funds prioritize investment in Capital for Infrastructure in
every local market and almost all of them are governed by
Local Managers. Governments and Multilateral Organizations
take part as investors in some of the funds.
Because of the regulation and competitiveness framework
in which the Mandatory Pension Funds operate in LAC,
profitability is measured in short observation periods. It is
fundamental not to have assessment-related distortions in
such products, and therefore clear standards are required for
the assessment. The complexity in analysis of these products
requires plenty of means that are hardly attainable in a PFA.
For the benefit of the affiliated themselves, it makes sense to
find synergies at a systems level.
In this regard, Pérez de Muniain suggested that Governments
set up a regulatory framework integrating homogeneous
assessment plans for all the investors, validated by an
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