Pablo Coballasi
Managing Director
Pc Capital
View from the Top

Education, Sustainability, Consumer Services Drive Investment

Wed, 10/24/2018 - 18:15

Q: PC Capital’s private equity fund prefers investing in education, financial services, consumer and sustainability industries. Why these in particular?
A: The firm believes that education, sustainability and consumer services are the pillars of Mexico’s future development and will require further financial backing to continue growing. In the last two years, consumption in Mexico has been increasing at an accelerated rate because the country’s middle class has also expanded. This sector is expected to continue making a significant contribution to Mexico’s economy over the next 10 years and PC Capital does not see any reason to believe otherwise. PC Capital’s focus for the short to midterm will be to continue supporting SMEs in the consumer sector and in the area of sustainability.
Q: What are PC Capital’s top success stories?
A: One of our success stories in the financial services industry is our investment in Te Creemos Holding, which has now become the largest private microfinance company in the country. The company employs over 4,000 people and has grown by more than 10 times in revenue and over 15 times in earnings in the last three years. In the consumer services sector, we also had great success with Grupo Filoa, a cafeteria management company that we exited this summer with an IRR of over 80 percent. Regarding sustainability, we have also had the benefit of experiencing tremendous growth derived from the preference of consumers for sustainable products. An example of that is our recent investment in Rancho Los Molinos, which is the most important seed distributor in Mexico with sales of more than 200 million seeds per year and presence in all major retail chains in the country.
Q: PC Capital has begun talks to raise a new fund of up to US$200 million. Where will this money be invested?
A: We want to keep supporting and strengthening SMEs and their contribution to the Mexican economy. Among the firm’s objectives is to continue investing in sectors that benefit Mexico, create wealth and encourage the country’s economic development. At the same time, PC Capital wants to help these SMEs grow. This new investment fund will be launched in 2019 and will invest between US$5 million and US$25 million per company.
Q: What internal and external elements could hinder investment in Mexico?
A: Support for private investment by the new government will be key for the country. It is necessary for the new government to support and continue to implement public policies that benefit all industries and the active participation of the private sector. The last administration did a good job in giving the private sector the opportunity to strengthen itself and even openly participate in industries where it was not possible before, like the energy sector. The government must also be inclusive and consider SMEs, since approximately half of Mexico’s GDP derives from these types of companies, which is also the focus of PC Capital’s investments.
Q: In 2018, PC Capital celebrated its 10th anniversary in the Mexican market. What have been the main guidelines for PC Capital’s track record over these last 10 years?
A: We are very happy to have reached 10 years of working for our investors in Mexico. PC Capital’s investments in the country have been very successful and our companies are all leaders in their respective industries. Our goal at PC Capital is to achieve strong financial returns for our investors but also to generate social impact in the community. These guidelines have cemented our investment criteria to help us create jobs, gender equality and take care of the environment at the same time that we achieve financial success. We are proud to say that through our portfolio, we now employ over 5,000 people, of which over 40 percent are women. We are generating economic wealth in every state and are present in over 3,500 retail outlets that reach both urban and rural communities. These provide sustainable products and financial services to all segments of the population.