Alta combines the experience and approach to best capture the potential of private equity in Mexico. Our investment team has performed multiple successful transactions in Mexico, Latin America, and the U.S., grown large transnational companies as well as startups, and has an extensive network of business owners and management professionals in Mexico.
We focus on growth stage investments where our operating experience and capital enhances the target companies’ potential. Our successful approach towards making minority and majority investments in Mexico as well as our track record of creating solid partnerships with business owners and managers provide us with a larger group of promising opportunities. Additionally, Mexico´s solid economy as well as its increasing international competitiveness projects a positive outlook for investors.
Growing economy and domestic market
- GDP Growth rate above 4% overall in past three years
- Over half of the population under 27 years old
- Emerging middle class
Strong country risk profile
- Weathered 2008 economic downturn and quickly regained growth
- Average fiscal deficit of 0.7% and inflation rate of 4.8% in the last decade
- Public sector debt under 20% of GDP as of 2011
Increased competitiveness in the global economy
- Increasingly attractive choice for labor-intensive manufacturers
- Proximity to the U.S. market and numerous free trade agreements
- Possible implementation of economic reforms
Limited availability of capital
- Bank lending to private sector of only 35% percent of GDP
- Low private equity participation compared to BRICs
Sources: Santander Investment Report; Deutsche Bank Research; Trading Economics, INEGI; Nomura Equity Research; CNBC; Emerging Markets Private Equity Association-
Mexico has a large and growing economy that is undergoing substantial modernization. Events that occurred since the past two decades, such as the opening of the economy, and the passage of the North America Free Trade Agreement (“NAFTA”) , among others, have been critical as first steps to cement the pillars of a sustainable growing economy. Mexico’s increased manufacturing competitiveness and the prospect of passing economic reforms are expected to generate attractive GDP growth.
Key elements of our strategy to create value include:
Create successful partnerships
Ensure alignment of interests and common values, negotiate significant role and alternative exit options, and commit to a common vision for the company.
Comprehensive due diligence
Complement management teams with top talent
Hands-on approach to portfolio company management
Ensure optimum value upon exit
The objective of Alta is to achieve high absolute returns by pursuing a growth equity, “buy-and-build” strategy through privately negotiated investments in private companies with principal operations in Mexico. Alta acquires significant influential minority positions and controlling stakes in portfolio companies. This may include providing some liquidity to founding shareholders. When investing in minority positions, the Fund will seek certain contractual rights plus a negotiated path to an exit. Investments will typically range from $10 to $30 million.