VIEW FROM THE TOP
SPURRING GROWTH AT MEXICAN COMPANIES ARTURO J. SAVAL Senior Managing Partner of Nexxus Capital
76
Q: Nexxus Capital is run and managed by Mexicans. What
A: It is important to recognize that private equity in Mexico
advantages does this give you over other investment funds?
is a relatively young industry. It is a country in which private
A: Nexxus Capital has been in the market for over 19 years.
equity funds arrived before Mexican companies understood
An important advantage is that we know the country, we
what private equity could do for them. This has led to a
know a lot of people and we can add more value more
slower adoption rate of private equity among medium-sized
quickly to our investments than a fund manager established
companies. Still, adoption depends on the industry. In the
in another country. We are a generalist fund, meaning
infrastructure sector, the situation is somewhat different,
that we invest in any kind of company that needs growth
since you are talking with more sophisticated people who
capital. Nexxus Capital is among the most important firms
have experience using private equity. It is similar in real
in terms of managed assets. Of the US$51 billion managed
estate. The learning curve in sectors like infrastructure or
by funds registered in AMEXCAP, Nexxus is responsible for
energy has been faster than in other sectors.
almost US$1 billion. We are in the process of investing our sixth fund and we soon expect to raise our seventh fund
Q: What needs to be done to boost the participation of
as well as an additional fund specialized in debt. We are
more companies in the Mexican Stock Exchange?
also working to set up a fund in Spain for medium-sized
A: Of all the companies listed in the BMV, Nexxus Capital
companies.
has helped five of these launch their public offering and soon we will be responsible for a sixth company listed.
Q: What is Nexxus Capital’s view of the belief that instead
There are a number of reasons why companies are reluctant
of a shortage of investment funds there is a shortage of
to go public. The first is fiscal policy. In most countries, a
projects in which to invest?
company eyeing an IPO understands that its fiscal burden
A: The need for capital is infinite; however, out of this infinite
will likely be reduced because the host country recognizes
number of companies that we could target, we must analyze
that the company will be in the country for a long time.
which companies can grow and then which companies also
In Mexico, this special tax regime is not applied, meaning
want to grow and are looking for capital. The next step
that the tax that is being paid by public companies is 30
is to analyze which of these projects provide results that
percent, while in Brazil it is 15 percent, in Spain, 18 percent,
are attractive for the fund. Finally, we must consider two
and in the US, 19 percent.
things: conditions and prices. That is why it is sometimes said that there is more money than projects or companies
Entering to the stock exchange can also be traumatic
appropriate for investment. The fintech sector provides a
for some companies. When a company is family-owned,
good example. An appraisal of fintech companies shows
decisions are made in the dining room. When the company
that most are losing money. In a business like ours, we need
becomes associated with private equity, they lose control
to recognize how much a business can grow, not how much
and decisions must be subject to a vote. When you are a
it is losing.
public company, you have to take into consideration not only a partner who sits with you to make some decisions,
Q: Why has the private sector not taken advantage of
but also all your investors, to which you must report
private equity in Mexico?
everything related to the company within a 24-hour period. There are several companies and families that are not willing to undergo this ordeal. One out of every five companies
Nexxus Capital is a private equity fund that specializes
listed on the New York Stock Exchange has or had the help
in providing growth capital for medium-sized Mexican
of a private equity fund. In Mexico, in the past 15 years,
companies. It has helped to list companies like Grupo Sports
one out three companies listed on the BMV has had the
World, Genomma Lab and CrĂŠdito Real on the BMV
sponsorship of private equity funds.
