In Mexico City on November 27th, 2024, a significant announcement was made. The International Finance Corporation (IFC), a key member of the World Bank Group, revealed a US$30 million anchor investment in Nexxus Private Debt Fund II. This move is aimed at enhancing the accessibility of finance for small and medium enterprises (SMEs) within Mexico.

Unlocking Finance for Mexican SMEs with IFC's Support

Expanding Access to Finance for SMEs

The Fund has a total target size of MXN4 billion, approximately equivalent to US$200 million. IFC will take on the role of an anchor investor, injecting up to US$30 million in Mexican pesos or up to 20 percent of the total investment commitments. This investment is crucial as it addresses the financing gap faced by SMEs. In the context of nearshoring opportunities, where Mexico's economy is set to benefit significantly, these SMEs often struggle to obtain long-term and affordable capital. With this investment, they have a better chance to seize the growth potential.Micro and SMEs make up 99 percent of total firms in Mexico and are responsible for around 70 percent of the country's total employment. However, their access to finance remains a challenge, with credit penetration rates lower than the regional average. Women-owned SMEs face even more financial constraints, widening the gender gap in access to finance. IFC's investment in Nexxus aligns with its commitment to supporting SMEs and promoting sustainable economic growth. By providing this financial boost, IFC aims to stimulate economic activity, create jobs, and foster inclusive and sustainable development in Mexico.

IFC's Role and Expertise

IFC will not only provide the much-needed capital but also offer expertise in environmental and social standards, risk management, and credit analysis practices. This comprehensive support is expected to have a significant impact on increasing access to finance for SMEs and bolstering the development of the private debt funds market in the country.Nexxus Capital, a leading alternative asset manager, has been successfully investing in high-growth middle market companies since 1998. With a focus on creating long-term value for investors and portfolio companies through local teams in Mexico and Spain, Nexxus has raised US$1.9 billion across 11 funds. They have invested in over 60 companies through various alternative asset classes, including private equity, private debt, and industrial real estate. Nexxus is the only manager in LatAm to have listed 7 companies on the stock exchange. Their disciplined approach to value creation makes them a trusted partner in the financial landscape.

Long-Term Impact and Partnership

This investment marks a significant milestone in IFC's relationship with Nexxus. IFC began its partnership with Nexxus in 1999 as an early limited partner investor in one of its private equity funds. Over the years, this relationship has grown, and now with the anchor investment in the private debt fund, it continues to strengthen. Nexxus Capital Chairman, Arturo Saval, expressed his gratitude for IFC's continued support. "We are very glad to continue our debt operations to sustain the growth of SMEs in Mexico and honored to have IFC as a repeating investor with Nexxus in different funds for more than 26 years."Roberto Langenauer, Nexxus CEO, also emphasized the importance of the partnership. "It is always an honor to have the IFC as an investor. We look forward to delivering superior returns to the IFC and all our investors in the new debt fund."This investment not only benefits the SMEs but also contributes to the overall economic development of Mexico. It showcases the power of collaboration between international financial institutions and local asset managers in driving sustainable growth and creating opportunities for businesses and communities.