Protego Plans PPP CCD

Mexican boutique Protego is planning to issue a Certificado de Capital de Desarrollo (CCD) in the domestic market. The fund will focus on infrastructure investment in state and local-level public-private partnerships. “The idea is to have dedicated funding for local governments. If we had the opportunity at the federal level we would take it, but the main focus is at the state and local level,” says Protego senior MD Fernando Aportela. He adds that the transaction should raise MXP2.0bn-MXP2.5bn, and have a return structure in line with the standard private equity model. Aportela says the focus of the infrastructure CCD is a natural extension of the advisory work Protego does. It has advised 9 Mexican states in the process of amending laws to allow PPPs, and claims another 6-7 similar clients in the pipeline. Aportela expects an increasing number of such projects to be approved and require funding over the next few years. “If you look at the state level, you will see a strong track record of public-private partnerships,” he adds. Most of the projects evaluated during the fund’s 5-year investment horizon should be $100m-$200m equivalent in size. The CCD will focus on public services such as communications, transportation and water, as well as environmental and social infrastructure. Protego’s own brokerage arm will place the deal, which is expected to have a 10-year tenor. As with other existing and planned CCDs, Protego aims to raise a parallel fund, which will include investment from the IIC and Fonadin. Protego, which operates in partnership with US-based Evercore Partners, joins MBIA subsidiary LatAm Capital Advisors, and Marhnos Infraestructura in the infrastructure-fund CCD pipeline. Last year Macquarie raised MXP3.4bn from such a transaction.