Mexico Development I

The Fund is seeking up to US$50,000,000.00 to invest in Small and Medium Enterprises (“SMEs”) that need working capital injections to fuel unmet demand for their products and capital investments to replicate already proven business concepts. The Fund will make private equity investments that focus primarily on the sustainability, financial services and education industries. Fund manager has more than 15 years experience in buying, managing and selling companies.

The Fund

A $50.0 Mn USD private equity fund to be invest in 5 to 8 Mexican SMEs with an enterprise value of $6.0 to $32.0Mn at the time of investment that could increase to $ 18.0 to $96.0 Mn per investment.

- Average investment of $5.0 to $8.0 Mn over the lifetime of each investment.

- Value will come from EBITDA growth and a multiple expansion at exit.

- Expected 5.0x to 7.0x EBITDA exit multiples.

- Sale to strategic investors or private equity firms.

- Projected return of 25.0% to 35.0% per investment.

- Working capital injections to fuel unmet demand.

- Expansion capital investments to replication already proven business concepts.

- Providing development equity capital to levered real estate projects

Financial description

I .Investing in majority positions or minority positions with strong minority rights in Mexico’s small cap high growth
II. Once invested, by committing additional resources to implement value-enhancing strategies to increase innovation and social impact, as well as revenues and EBITDA. Such resources and strategies may include:
- Additional working capital injections to fuel unmet demand for products and services;
- Additional capital investments to expand production capacities, optimize operations or replicate already proven business concepts/units in different geographies;
- Implementation of company governance and financial reporting structures, IT systems and controls;
- Creation of new or complementary management positions;
- Appointment of board members, independent auditors, consultants and advisors.
III. Divesting at enhanced valuation multiples by:
a. Conducting auction type processes with international and local larger private equity funds and strategic investors currently starving for institutionalized, high quality deal flow of middle market Mexican companies:
i. Expected 6.0x to 8.0x EBITDA exit multiples;
ii. Projected gross returns in excess of 35.0%.
b. Exercising pre-arranged PUT options to company founders and/or co-investors.
c. Conducting leverage recapitalizations of asset deals where little or no debt was employed to grow the businesses but are mature enough to do so at exit.