Colombian Pension Plans US$1.3 Billion Investment In Private Equity

Mar 11 2010 | 1:46pm ET

A few private equity firms will have the booming Colombian stock market to thank for their good fortune.

Having reached the legal limit of 40% in stocks—due to the 53% jump in Colombia’s IGBC Index—the country’s second largest pension fund is planning a big push into private equity. Proteccion SA will pour 2.4 trillion pesos (US$1.3 billion) into p.e. over the next two years, Bloomberg News reports. That will bring its allocation to the asset class to 10%; currently, the pension invests less than 1% of its 24 trillion pesos in private equity.

“We can’t buy more stocks, so private equity is the most exciting thing right now,” Juan Luis Escobar, Proteccion CFO, said. “We are looking at infrastructure funds that invest in highways, water treatment, waste and airports.”

Half of Proteccion’s new p.e. allocations will go to fund focused on Colombia, a growing group that includes Darby Overseas Investments and Brookfield Asset Management. The other half will be invested in international funds.

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