MEXICO

EMPEA • MAY 2016 | 33
(Continued from page 31)
AN EXPANDING ARRAY OF EXIT OPTIONS
Strategic sales have proven to be the most viable exit channel
in Mexico, accounting for over half of all exits in Mexico recorded
by EMPEA during the past two years. However, many fund
managers are optimistic that secondary sales and listings on
the public market could become more common in the coming
years, as the local private equity industry and the infrastructure
surrounding it continues to develop.
Strategic Sales
Mexico is a market well suited for exits via strategic sales for many
reasons. Perhaps the most obvious reason is its geographic and
economic proximity to the United States. Mexico is the United
States’ third largest trading partner, accounting for US$295
billion in imports and US$236 billion in exports in 2015, and
makes up an increasing amount of the manufacturing capacity
of U.S.-based companies, most notably the American auto
industry. 19 Undoubtedly, Mexico’s economy is tied to that of its
northern neighbor, and companies looking to cash in by catering
to the world’s largest economy could find Mexico an attractive
place to set up shop.
“Having invested in private equity in
Mexico since the beginning, we faced
an ill-developed ecosystem and have
had to go through a learning curve,
as did all of our fund managers who
were either first-time fund managers
focused on Mexico or international
fund managers investing in Mexico for
the first time. We all had to learn our
way. Given our collective inexperience,
the returns from the early vintages
were surprisingly good, and they have
continued to improve ever since.”
– Felipe Vilá González, Fondo de Fondos
19. U.S. Department of Commerce, Census Bureau, Economic Indicators Division. “Top U.S. Trade Partners: Ranked by 2015 U.S. Total Export Value for Goods.”
See: http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_003364.pdf