Fund of Funds CCD Wraps Up First Close

AGC Controladora has raised MXP553m ($42m) from a certificado de capital de desarrollo (CCD) transaction in Mexico’s domestic market, according to regulatory documents. The private equity manager affiliated with US-based Northgate Capital 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 managed the transaction. Last month, Corporacion 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.