Indigo 1, L.P.
Last updated 11 May 2020, by Impactyield.
Indigo 1, L.P. is a US$69.5 million fund focused on providing private equity and mezzanine debt financing to mid-sized Mexican companies with a focus on underserved high-growth potential industries with a preference for those serving “Bottom of Pyramid” and
“Green” sectors. The fund will focus on both equity and mezzanine debt transactions. The fund will be an early mover in a growing Entrepreneur Capital industry in Mexico and will meet the capital needs of small and medium enterprises (“SMEs”) that have limited access to traditional financing mechanisms, and at the same time, fall below the “radar screen” of private equity firms seeking to invest larger sums of capital on a per transaction basis. The aforementioned will make Índigo I a unique private investment vehicle focused on an underserved segment of the market where competition seeking attractive growth and value opportunities is scarce.
The Fund is lead by Everardo Camacho and Bernardo Paasche ("The Principals"). The Principals have have a long and successful track record in: Mexican private equity; Mezzanine debt; Public equity buy & sell-side transactions; Buy & Sell-side investment banking.
The objective of the fund is to achieve superior returns through an efficient and competitive management platform of Capital Emprendedor and Mezzanine Debt . These returns will be accomplished by making structured investments in companies with strong potential for growth, robust cash-flow generating capacity and capital appreciation potential. The fund, through the acquisition of interests in portfolio companies, will exercise influence in their management, operation and financial structure.
The fund aims to provide investment-level pre-tax returns on its invested mezzanine debt capital of 20% and on its invested equity capital above 30% on a portfolio basis.
Through a diversification of Equity and Mezzanine Debt, Principals are aiming to reach a ROI of 26%.
Key performance indicators
Asset manager: Capital Indigo
Product track record: Fund has 10 years of track record
Target IRR: 26%
Committed Capital: 69,500,000 USD (US Dollar)
Target return category: Risk-adjusted market-rate of return
Fund domicile: Mexico
Product status: Closed - no longer investing
Inception year: 2012
Vintage year: 2012
Target close date: n.a.
Product term: 10 year term
Assets under management: 60,000,000 USD (US Dollar)
Investment size: Min: 1,000,000; Max: 25,000,000; Avg: 7,000,000
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 0
Fund investments to date exited or repaid: 0
Management fee: 2.5%
Carried interest: 20%
Hurdle rate: 8%%
GIIN Investors' Council Investment: No
Limited Partners / Investors: n.a.
Limited Partner / Investor Type: Development Finance Institution (DFI), Family Office, Pension Funds, Other Institutional Investors, Retail Investors
The Fund will focus primarily on Mexican SMEs that preferably serve “Base of Pyramid” and “Green” clientele in multiple industries. The Fund seeks to invest in companies that are environmentally and socially responsible, are compatible with low-carbon economic development; respect human rights (including the rights of workers and the rights of affected communities) and; overall, avoid negative ecological and social impacts. If profitable opportunities become available in SME with an approach different from BoP or Green, Management will invest in them as long as they do not contradict the positive impact of sustainability in the World (i.e. businesses that have a significant negative impact on the ecology).
Based on their past investment experience in the green and BoP opportunities, Indigo 1 Principals are aware that SME in Mexico focusing on the sustainable utilization of natural resources are a great source of growth and profitability. By investing in SME with this focus, not only would Indigo 1 be helping promote the development of renewable and sustainable efforts, but also create a multiplier effect on jobs, income, income distribution and overall growth for the Mexican economy.