Two June events will analyze Mexico’s policy framework and provide corporate governance training
Mexico City, June 9, 2005 – Two events taking place in Mexico this month will build on recent governmental and private sector efforts to encourage the widespread adoption of best practices.
With a new law pending in Congress to modernize the capital markets and enhance corporate governance, a back-to-back Policy Roundtable and Training Course on Corporate Governance will spotlight the private sector’s role in improving Mexico’s investment environment.
The events, presented June 9-10 in Mexico City by the Latin American Venture Capital Association (LAVCA) and the Mexican Private Equity Association (Asociación Mexicana de Capital Privado, AMEXCAP), in collaboration with Nacional Financiera (NAFIN) and the Multilateral Investment Fund (MIF), are designed to raise awareness of issues necessary to growing the venture capital and private equity industry in Mexico. Venture capital has long been seen as an important vehicle for economic growth and job creation in nations throughout the world.
“Mexico has a young and expanding venture capital industry. Global investors are increasingly active in Mexico, recognizing growth potential in key sectors,” said Christina Kappaz, LAVCA Interim Executive Director. “That said, there are key issues to be resolved now, in particular bringing down transaction costs to facilitate investments that reach smaller firms at an earlier stage.”
The event series will begin June 9th with an invitation-only Policy Roundtable analyzing the legal framework for venture capital and private equity in Mexico. The roundtable, to be held at Mexico City’s Club de Industriales, will feature presentations from such public and private sector leaders as:
- Alonso García Tames, Subsecretario de Hacienda
- Mauricio Basíla Vega, Vicepresidente de Supervisión Bursátil
- Federico Patiño, Director General Adjunto de Inversiones, Nacional Financiera, SNC
- Luis Harvey, Gerente Principal, Nexxus Capital
- Antonio Ruiz Galindo, Presidente de AMEXCAP
“This type of public-private dialogue is critical to advancing reforms,” said Susana Garcia-Robles, MIF Investment Officer. “Although efforts to promote Mexico as a venture capital destination are already beginning to have effect, reforms are still needed for this industry to grow and mature in a sustainable way.”
Recent increases in fund-raising are encouraging, said Ms. Kappaz. In 2004, 34% of funds raised for Latin America were designated for Mexican investments—a sharp improvement to the region’s first decade of venture capital activity (1993-2003), in which Mexico received just 10% of capital invested in Latin America.
Two important public sector initiatives will be discussed during the Roundtable:
- The new capital markets law. The law, which has already passed the Senate and is currently being debated in the House of Representatives, would create an opt-in regime by which companies choose to adhere to a set of corporate governance standards in line with international best practices. Without the minority shareholder protections and other governance practices expected by global investors, most venture capital deals in Mexico today work through offshore holding companies.
- The creation of a national fund-of-funds. Currently under debate is whether to consolidate all government investments into a new semi-autonomous fund of funds, to serve as a more efficient vehicle for disbursing public investment into private sector-run venture capital funds.
“While these initiatives will do much to attract additional investment to Mexico, additional reforms are still needed to make the country competitive,” said Antonio Ruiz Galindo, President of AMEXCAP and Managing Director of Industrial Global Solutions.
Issues to be raised by the private sector include the need for an appropriate corporate vehicle in Mexico for incorporating funds under locally a self-regulatory regime as well as the need for consistent rules, particularly with regard to tax regime, that are applicable to offshore funds.
As a complement to the policy initiatives, the subsequent LAVCA/ AMEXCAP Course on Corporate Governance provides hands-on training for both fund managers and directors of their investee companies on international best practices related to professional Boards and governance. The course is facilitated by the U.S. National Association of Corporate Directors (NACD) and utilizes relevant Latin American case studies to explore the dynamics of family-controlled enterprises in a corporate environment.
The training course gold sponsor is a special working group on corporate governance comprised of Deloitte & Touche, PriceWaterhouseCoopers, KPMG, Ernst & Young, BDO, and Grant Thornton. Luce Forward Hamilton & Scripps, LLP serves as bronze sponsor for the Policy Roundtable. More information about both events is available at www.lavca.org/lp/events_e.html.
LAVCA’s mission is to promote the growth of the venture capital and private equity industry in Latin America through research, education, networking, best practices, and the advocacy of sound public policy. LAVCA is a not-for-profit trade association serving a core membership of venture capital and private equity firms that invest in emerging companies. For more information on LAVCA and its activities please visit www.lavca.org.
AMEXCAP was created to promote and develop the market for private equity funds in Mexico through research, education, networking and best practices, and to become the voice of private equity and venture capital industry with Mexican authorities. AMEXCAP involves the national and international investment community as well as different institutions and public and private entities that participate in activities relevant to the sector. For more information on AMEXCAP and its activities please visit www.amexcap.com.