Portland Private Equity (PPE) recently raised $1.5 billion from two dozen pension funds and financial institutions for its Caribbean Fund II, according to partner Mariame McIntosh Robinson, who led the complex transaction.
The deal has regional investment implications.
PPE, chaired by business mogul Michael Lee-Chin, raised the funds in order to invest in fast-growing medium-sized companies in Latin American and the Caribbean.
"We already invested in two companies," said McIntosh Robinson in an interview this week.
So far, Portland Caribbean Fund II has invested in CVBI,
a spin-off holding company from the technology merger of Cable & Wireless and Columbus Communications. It also invested in Penonome, the largest wind farm in Panama.
"The team intends to complete six to eight deals over the course of the fund life," said McIntosh Robinson. "We are sector-
agnostic, but we like deals in the
sectors we know the best - telecoms, energy, and financial services. We expect the portfolio to also have general services and perhaps agro-processing," she said.
The private placement, which was completed in October 2015, was supported by Victoria Mutual Wealth Management as the broker and Hart Muirhead Fatta as legal counsel, led by Sanya Goffe. Fund II will continue to provide growth equity capital to companies in the Caribbean Basin as a continuation of its successful strategy in Fund I.
PPE has nearly completed raising funds for Fund II, targeted within the US$150 million to US$200 million range. Fund managers were attracted to the previous returns of Fund 1 at 17 per cent net internal rate of return and a net return on invested capital of 2.3 times to date. Fund I officially ends in January 2017.
"So we think it's a good product," said McIntosh Robinson. "It could add to the diversification of portfolios of pension funds as opposed to just holding bonds."
Portland executed the private placement via six fund managers, which represented the interest of 25 pension funds, she said. Fund II started in July 2014 and has a life of 10 years.
The monies from Jamaica were raised via PJX Limited, a special-purpose vehicle to pool funds from these investors. Other investors in Fund II came from the Development Bank of Jamaica, IFC, Export Development Canada, the European Investment Bank, the German Development Bank, The Caribbean Develop-ment Bank, the Inter-American Investment Corporation, and investors from North America.
The deal is complex in its pooling of so many pension funds for equity-type investments.
It will allow local-based companies to partake in investments in companies overseas.