CPPIB invests $100m in LatAm fund

CPPIB has made the investment in a high-yield bond fund managed by Chile-based Moneda Asset Management.

Canada’s largest pension fund manager, Canada Pension Plan Investment Board (CPPIB), has made a $100 million investment in a high-yield bond fund which invests in US dollar-denominated corporate credit of companies based in Latin America, according to a statement.

The Moneda Deuda Latinoamericana fund, with $979 million committed capital as of April 2015, is managed by Moneda Asset Management, headquartered in Santiago, Chile.

The investment is the second that CPPIB’s principal credit investment division has made in Latin America, PDI understands. The CAD264.4 billion pension fund manager headquartered in Toronto previously provided a bilateral loan to a Mexico-based corporate owned by private equity firm Advent.

The latest commitment is seen as a way for CPPIB to gain presence in the high yield sector in Latin America, often seen as too small for investors to gain access to directly, a market source said.

Mark Jenkins, senior managing director & global head of private investments, CPPIB, said in a statement: “Moneda is a well-established, successful fund manager run by a strong management team with a proven track record. We look forward to building our relationship with the Moneda team as we seek to expand our presence in the region in this sector.”

Fernando Tisné, senior partner and portfolio manager of the Moneda fund, added: “We have been able to take advantage of credit opportunities in Latin America over the last 15 years by building a highly diversified portfolio, not only by issuer, but also by country through a deep fundamental analysis process. We believe that it is of utmost importance to be methodical in the investment process, build a highly diversified portfolio and invest with patience.”

Moneda is responsible for $4.5 billion in assets making it one of Latin America’s largest asset managers. It was founded in 1993 by three of its executives together with the International Finance Corporation, part of the World Bank.

The fund manager looks after institutional investor capital from pension, sovereign wealth funds and family offices globally including Chilean life insurance companies. It initiated its Canadian business in 2011.

The Moneda Deuda Latinoamericana has had an annualised return in US dollars of 10.5 percent, 9.8 percent and 11.7 percent for the last three, five and ten years.