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Colombia: Ten Years of Development of the PE Industry

Posted on: 15 Feb 2017  |  Luis Gabriel Morcillo,Brigard & Urrutia Abogados and Lyana De Luca, Brigard & Urrutia Abogados

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Colombia’s PE industry has reached its first decade (2006-2016). Incorporation of local funds has been successful for an emerging economy, placing Colombia in the spotlight of foreign and domestic GPs willing to incorporate local PE vehicles or to raise capital from local investors, specifically in the real estate and infrastructure sectors. Simultaneously, local investors such as pension funds and insurance companies are increasingly seeking attractive PE opportunities offered by international managers abroad. 

Colombia’s PE industry has reached its first decade (2006-2016). Incorporation of local funds has been successful for an emerging economy, placing Colombia in the spotlight of foreign and domestic GPs willing to incorporate local PE vehicles or to raise capital from local investors, specifically in the real estate and infrastructure sectors. Simultaneously, local investors such as pension funds and insurance companies are increasingly seeking attractive PE opportunities offered by international managers abroad. 

Development Per Sector: Infrastructure and Real Estate

Colombia currently has 11 domestic infrastructure funds with total committed capital of US$5.2 million. This represents a 100% increase on the existing infrastructure initiatives with respect to 2015, that obeys to the significant demand for private financing of infrastructure projects derived from the US$15 billion 4G toll-road program sponsored by the Colombian government.

In fact, the Colombian government has put in place a robust infrastructure program, focused not only on roads but also on other sectors such as airports, rail, ports, mass transportation systems, hydrocarbons, gas and energy. Pursuant to the Financiera de Desarrollo Nacional, the infrastructure sector needs approximately US$25 billion to finance infrastructure projects in the following years. The Colombian government has only US$4 billion, which represents a huge opportunity to other investors such a local and foreign PE funds.

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