Latin Finance - September/October 2010 - 86

Mexico temasek investment

Temasek Sees Potential
by Natalie Feary

T

emasek set up shop in Mexico two years ago, headed up by former Barclays CEO for Mexico Lorenzo González Bosco and in July announced its first private investment. Up to then the fund’s Mexico portfolio had been made up of stocks from the equity market. Investing in Entrepreneurs In an exclusive interview, the fund’s A joint venture with Impulsora Mexicana de managing director of investment Desarrollos Inmobiliarios (IMDI) to develop for Mexico tells LatinFinance where land banking projects across several Mexican he sees opportunity in the region’s states was announced in July. “As the middle second biggest economy. class in Mexico continues to grow there is Singapore’s $140 billion sovereign the need for housing with master planning,” wealth fund, focused primarily on Asia says González. and Singapore, has a clear interest The IMDI venture involves each side in LatAm. Just 10% of the total committing $100 million over three years, a portfolio is earmarked for investment relatively minor amount for the Singapore in developing markets beyond Asia. fund. Investment in the project will run González says the majority of this for six years, though González declines to $14 billion pot is destined for LatAm, comment on how much the fund would so Temasek’s footprint in the region invest in the subsequent three. The project should soon become more noticeable. will involve buying suitable land, followed Not satisfied with having already by the development of infrastructure then set up offices in Mexico and Brazil in selling the land on which to build shopping 2008 to build its investment portfolio, malls, homes, and commercial space. Riding Mexico’s recovery: Temasek’s González it has also set its sights on other key González is bullish on Mexican recovery players in the region. It has made and expects the economy to continue to investments in Brazil and in March bought a 1.18% stake in grow this year and through 2011. “We want to take advantage Chile’s LAN Airlines. It is looking at potential private equity of Mexico’s strong recovery and look to partner with companies investments in Chile, Colombia and Peru, which it will look that are coming out of the crisis and are once again focused on to start doing as of next year out of the Mexico office, in what growth and expansion and require capital investment,” says González calls its second phase of LatAm investment. González. González says the last two years have been spent doing In particular he sees structural change in local capital research into where value is to be found in Mexico, as it looks markets as beneficial to expanding Mexican companies. “It to build a portfolio with both public market and private equity is the first time new companies have access to private equity investments. Expectations of returns from the latter are above funds from local capital markets, which institutional investors 25%, he adds. want to invest in,” says González. LF Infrastructure, education, healthcare, financial institutions, energy, renewable energy, specialized retailers and any industry that provides services are all sectors in Mexico where Temasek > UPDATE sees considerable potential. The fund’s first private investment, in a land banking project, shows the hefty gains it expects to be Full interview available only online at www.latinfinance.com had from providing services to a growing middle class.

As relations between Asia and LatAm strengthen, Temasek sees itself well positioned to ride Mexico’s recovery. The sovereign wealth fund is teaming up with entrepreneurs.

86 LatinFinance

September/October 2010
http://www.latinfinance.com
Latin Finance - September/October 2010

Table of Contents for the Digital Edition of Latin Finance - September/October 2010
