Fund of Funds CCD Set for First Close

AGC Controladora is set to raise the first cash from a fund of funds certificado de capital de desarollo (CCD) transaction in Mexico’s domestic market. The private equity manager affiliated with US-based Northgate Capital is set to close the first MXP600m ($45m) portion of the fund, according to regulatory documents. It plans to raise up to MXP13bn through a 10-year fund, adding to the initial amount through capital calls. The transaction is being called the first fund of funds in the CCD market, though it will be able to make direct investments in Mexican companies in addition to other PE funds. Regulators’ decision last year to allow capital calls in CCDs ended a debate that had slowed issuance for the 2-year-old asset class. Many were optimistic this would lead to more deals, but market conditions have not cooperated. The ACG fund plans to invest in a variety of sectors, but the return structure varies somewhat from most PE fund-based CCDs. Investors receive their initial investment plus a preferred return equivalent to the Mexican Bolsa’s plus 500bp, before the managers take a 5% cut, with any remaining funds being divided between investors (95%) and managers (5%).Vector is managing the sale. Earlier this month, Corporcaion Mexicana de Inversiones de Capital (CMIC), also known as Fondo de Fondos, filed for a MXP1bn-MXP5bn ($71m-$355m) CCD fund investing alongside CMIC’s FdeF II fund, seeking investments in other funds targeting real estate, infrastructure and other areas.