VIEW FROM THE TOP
CHANGE IN AFORE RULES TO BOOST INFRASTRUCTURE INVESTMENT JUAN MANUEL VALLE Director General of Afore XXI Banorte
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Q: How attractive are infrastructure and real estate for
A: We are active investors in all the projects in which
Afores, especially with the emergence of new investment
we are involved. It usually takes six months from the
vehicles?
first proposal to the time we authorize the investment.
A: Infrastructure projects are the perfect match for pension
Our investment team analyzes each project and once
funds. It is natural that Afores want to participate more in
it has a strong case, it is then presented to an internal
these types of projects. Afore XXI Banorte has put together
committee. Several lawyers and I participate in this
one of the strongest investment teams in the country that
internal committee, which is where we submit the project
focuses on alternative investments with sound corporate
as an internal discussion to prepare for presentation to
governance and processes. We have been putting together
the Investment Committee. In 2016, we approved one of
a benchmark portfolio that reflects our strengths.
every three projects that we received.
Afore XXI Banorte has committed more than MX$60 billion for investment in CKDs, of which MX$17 billion are invested in infrastructure
Q: How does the Afore prefer to participate when it comes to large infrastructure projects? A: For large projects, we work with the strongest players in the international markets such as Caisse de dépôt et placement du Québec (CDPQ), BlackRock and Riverstone. A good example is the Zama well that recently struck significant oil in shallow waters off the coast of Tabasco and is the first successful exploratory well found in the fields auctioned in the bidding rounds. Afore XXI Banorte
As of August 2017, we have committed more than MX$60
owns almost 5 percent of that project through two different
billion for investment in CKDs, of which approximately
vehicles issued by Riverstone and BlackRock. We are
MX$17 billion are invested in infrastructure (28 percent)
indirectly investing in this project because both companies
and MX$16.3 in real estate (27 percent). Afore XXI Banorte
approached us to invest in their CKDs.
has been involved in various successful real estate projects and is investing in new projects in Mexico. Among these is a
In the largest CKD that we have, Infraestructura Mexico,
major project that could change the footprint of downtown
we had originally planned to invest independently. But
Mexico City and this could be announced soon and could
we partnered with CDPQ and the idea of this CKD was
modify our investment figures.
that for any investment that CDPQ found interesting, we would invest at the same level, ensuring that neither
Managers have been more prompt to invest in real estate
would have the majority share. The company that would
than infrastructure in general, possibly because real estate
be operating the project would have to have 51 percent
projects are completed much more quickly. In infrastructure,
of the entire investment. This provides the incentive to
there are projects with a longer “J” curve, where we have
have good administrators and operators for the project,
yet to see results, whereas in real estate, we are already
as well as institutional investors that are there for the long
receiving flows. As an example, we are a significant investor
term. We have been working with funds that have been in
in the Red Compartida project, which will provide Mexico
the market longer than we have and we receive feedback
with over 90 percent of coverage in mobile and data service
from them to adopt best practices. Our teams also go
at speeds of 700MHz throughout Mexico.
abroad and receive training from these large international pension funds. We believe that our approach to creating
Q: How does Afore XXI Banorte approve an investment in
partnerships with other funds and international players
an infrastructure project?
helps improve the success of our investments.
