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Investment Strategy and Process

Value
Migration

The most attractive investment opportunities come from value migration, which adapts traditional business models to meet the needs of customers, communities, governments, and investors.

Customer
Needs

  • Changes in accounting standards (ie IFRS16)
  • Desire to sign long-term contracts
  • Customer preferences and sophistication
  • Market segmentation based on fee structures

    • Macro
    Trends

  • Changing competitiveness drivers
  • Changing international trade logistics chains
  • Changing geopolitical environment

    • ESG

  • Climate change risk management
  • Demand shift to sustainable products and services
  • Access to capital structures under ESG guidelines

    • Public
    Policy

  • Budgetary constraints
  • Reduced technical capacity of governments to structure projects
  • Decrease in the quality and functionality of public services

    • Innovation

  • Rethinking urban life
  • Disruptive technologies, trends, and behaviors

    • Perspectives by Sector

    The most significant opportunities in transport will come from the road sector and urban mobility projects, and in many cases will take advantage of new technologies. We also expect to pursue some interest opportunities in the port and airport sectors.

    • Insufficient public budget 
    • Low use of electronic tolls on highways
    • Vulnerability of infrastructure to climate change
    • Congestion in urban areas and major connection points
    • Inefficient intermodal connections
    • Negative externalities: emissions, accidents
    • Sufficient territorial coverage
    • Maintain existing infrastructure in good operating condition.
    • Increase private investment in infrastructure projects with their own payment sources
    • Incorporate state-of-the-art technology (i.e. tolls, mobility)
    • Improve road safety & security
    • Participation in concession bids for (new and existing) airports, roads, railways, etc.
    • Submitting unsolicited proposals
    • Taking advantage of opportunities in the secondary market
    • Development of new mobility solutions for cities
    • Implement traffic enforcement technology for surveillance and compliance
    • Provide services to optimize collection systems

    Many Latin American countries are experiencing water crises throughout all stages of the water cycle: extraction, potabilization, transport, and treatment. This provides opportunities for private capital to offer integrated or isolated solutions under well-designed regulatory schemes.

    • Shortage due to lack of resources and unequal access
    • Lack of integration in public bodies
    • Low levels of business efficiency
    • Insufficient budget and public capacity (IFRS)
    • Low levels of phisyc efficiency
    • Low levels and quality of treatment
    • Systems with attractive rates
    • Growth of metropolitan areas
    • Maximize physical efficiency levels
    • Increase treatment infrastructure
    • Increase access to resources in marginalized areas
    • Integrate organizations that operate in large metropolitan areas to generate economies of scale
    • Modernize public assets optimizing budget and accounting restrictions
    • Establish tariff levels according to the service and improve commercial efficiencies
    • Comply with stricter environmental regulations
    • Acquisition of private concessions in metropolitan areas with attractive rate levels
    • Development of private participation schemes in consolidated public organizations
    • Participate in public bids for treatment projects with PPP schemes that comply with IFRS
    • Submit Unsolicited Proposals that meet public needs (eg aqueducts) with innovative schemes

    Insufficient infrastructure for the import, transportation, and storage of hydrocarbons creates opportunities for private investment in storage and distribution terminals, as well as pipeline infrastructure.

    • Budgetary constraints
    • Complex and restrictive regulatory environment
    • IFRS16 implications for offtakers
    • Insufficient pipeline infrastructure and problems with theft and smuggling
    • Increased penetration of private brands
    • Dependence on key players in the industry
    • Insufficient warehousing infrastructure with low inventory days
    • Lack of connections and logistics in certain regions
    • Take advantage of the existing natural gas transportation installed capacity
    • Supply reliability
    • Meet growing demand
    • Develop storage terminals
    • Technological solutions to expand the pipeline network and reduce theft
    • Natural gas stations and transport to supply remote areas
    • Supply the demand for gas-fired power generation
    • Meeting the growing demand for natural gas and oil
    • The need to develop storage terminals to provide reliable and strategic control to private traders
    • Develop systems with strategic assets at import and demand points
    • Achieve interconnection and price efficiency through the construction and expansion of pipeline systems
    • Develop liquefied natural gas, compressor, and regasification plant projects
    • Leverage logistics arbitrage between Eastern UE and Asia

    The insufficient oil and gas production in LATAM creates an opportunity to participate in developing and/or already mature fields by entering agreements/partnerships/service contracts with oil companies and operators that have the technology, financial capacity, and global best practices to increase production and recovery factor.

    • Decrease in well drilling for development and exploration
    • Insufficient infrastructure
    • Technical complexity in obtaining new barrels
    • Declining oil and gas production in LATAM
    • Unused capacity, attractive to private operators
    • Investing in new developments and production infrastructure
    • Increased recovery factor
    • Improve the supply of inputs to productive wells
    • Investment in well maintenance and repairs
    • Optimize capital structures
    • Rebalance operator portfolios
    • Intensify exploration campaigns
    • Investment agreements with the government or private sector companies to recover or expand existing infrastructure capacity
    • Apply technologies and recovery methods to increase efficiency
    • Investment to exploit mature and/or new fields with world-class operators, and the technological and operational capacity to maximize recovery factors
    • Participation in bidding rounds for exploration and extraction

    Attractive investment opportunities will arise from Latin America’s electricity industry as it meets current needs, which will be defined mainly by a period of energy transition and governments with different restrictions to address this.

    • Electric vehicle adoption
    • Deficit in transmission and distribution
    • Old public assets
    • Insufficient budget and public capacity (IFRS)
    • New technologies (microgrids and batteries)
    • Goals for clean energy generation (governments) and consumption (businesses)
    • Poorly diversified energy matrices
    • Increasing energy demand and reliability
    • Meeting growing demand and supplying reliable power
    • Meeting clean energy generation and demand targets
    • Adopting new technologies to reduce costs and give consumers independence
    • Create more transmission infrastructure and reduce technical losses
    • Modernize public assets by optimizing budget and accounting constraints
    • Diversify the generation matrix to reduce exposure to commodity risk and natural resource availability
    • Participate in auctions, project development, and/or acquisition of strategic assets
    • Develop renewable projects in tandem with commercial efforts
    • On-site generation projects with microgrids and/or batteries
    • Unsolicited proposals for IFRS-compliant PPPs
    • Development and/or acquisition of projects with strategic locations in terms of supply demand balance and generation mix

    Investment Strategy

    AINDA's investment strategy is based on an in-depth top-down analysis by industry, and a detailed bottom-up analysis of each investment opportunity.

    In addition, AINDA’s active management approach identifies opportunities with projects that have room for development that can increase its medium-term value, while following strict responsible investment principles.

    Our investment strategy is based on projects that meet the following characteristics:

    1

    Opportunities that can be developed in the medium to long term

    2

    Fee structures that can be optimized

    3

    Opportunity to improve operational and commercial efficiencies

    4

    Financial structures that can be optimized

    5

    Adjacent businesses that can be created and have synergies with the project

    Investment Process

    In line with ILPA and UNPRI best practices, AINDA has a robust investment process, including ESG factors, for the identification, analysis, and management of investments in a timely and effective manner.

    Investment Process from the Prospectus

    *Spanish only

    The Prospectus was subject to an external audit by Deloitte, to verify statements made in the report.

    Assertions Report

    *Spanish only

    Opportunities

    See More

    Analysis

    See More

    Structuring

    See More

    Monitoring

    See More

    Exit Strategy

    See More

    At AINDA we bring together the experience and knowledge necessary to ensure the success of private equity investments in energy and infrastructure.

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    Address

    Calle Montes Urales 770 – Piso 1.
    Colonia Lomas de Chapultepec, CDMX, CP 11000.

    Contact

    [email protected]
    +52 (55) 4430 1105
    +52 (55) 4430 1108

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    How can we help?

    Creating Opportunities

    • Frequent contact with firms focused on finding sources of capital.

    • Attending events relevant to our sectors.

    • Create new ideas and negotiate, develop, and sign new alliances to obtain strategic control and competitive advantages.

    • Analysis and presence in government development plans.

    Analysis

    • Business model analysis to be reflected in a financial model.

    • Evaluation of investments and their upsides

    • Identification and risk management, with third party support.

    • ESG analysis supported by an independent expert.

    • Technical and independent validation of assumptions and sensitivity analysis.

    • Collection of background information from partners (independent KYC).

    • Feasibility of proceeding with the investment.

    • Technical and business peer review.

    Structuring

    • Negotiation of investment contracts and shareholders' agreements.

    • Incorporation of ESG commitments in line with AINDA's Responsible Investment Policy.

    • Structuring of EPCs and/or contracts with off takers.

    • Definition of capital structure.

    • Incentive schemes for partners, investors, and operators.

    • Planning for adequate monitoring.

    Monitoring

    • Active participation in the corporate governance of the portfolio companies.


    • Active engagement in the design and implementation of ESG strategies.

    • Monitor the proposed strategy to ensure operational and financial metrics are met.

    • Review of annual budgets.

    • Improvement of processes and management systems.

    • New business development.

    • Relationship with regulatory authorities and local governments.


    • Adherence to norms, standards, and codes of conduct with high criteria.

    Exit Strategy

    • Bilateral sale process that is competitive or has a limited number of participants.

    • Conversion of debt to equity or vice versa.

    • Companies fusion.

    • Issuance of debt or equity instruments (credits, shares, IPO).

    • CKD exit to a Fibra-E.