A new investment vehicle in Mexico meant to lure pension funds to invest in private equity strikes the right balance between transparency and the needs of entrepreneurs, an industry official said on Friday.
The new stock market-traded investment class, called CKDs, is meant to attract fund managers to put some of their $85 billion in assets in private equity to stimulate small and medium-sized companies.
Cautious of taking risks with the retirement savings of millions of Mexicans, pension funds have insisted that the CKDs include reporting requirements about the companies they invest in, a demand at odds with normal private equity investment.
But regulators appear to have struck an appropriate mix between reporting requirements and the need for small and medium-sized companies to keep secrets from the eyes of competitors, Amafore pension fund association head Oscar Franco told Reuters. "We're aware that it's a singular idea and there will probably be (private equity) funds that, given this unique situation of transparency in the world of private capital, decide not to participate, and that's legitimate."