Two seasoned Mexican infrastructure investors are raising a MXN 5bn (USD 291.4m) long-term debt fund aimed at structuring and financing greenfield and brownfield infrastructure and energy projects.

Eduardo Santoyo and Juan Alberto Leautaud, have launched MXM Infraestructura, a vehicle that will deploy mostly subordinated debt across approximately eight projects, targeting an average investment of MXN 560m per project, the executives told this publication.

“We’re raising a MXN 5bn fund to invest in greenfield or brownfield projects through subordinated debt,” Santoyo told this publication. “It’s the same strategy that Juan and I have used successfully in the past.”

The fund, whose acronym stands for “México por México,” (Mexico for Mexico) reflects their opinion that local expertise is essential to developing complex infrastructure assets in the country. “We believe that infrastructure is a sport that is best played locally,” Leautaud said. “A major differentiator for us is that it is necessary to have a robust team, locally located, with not only management but also analytical capabilities.”

Lengthy track records 

Both founders bring decades of experience in Mexican and Latin American infrastructure markets. Santoyo previously led the MXN 3.5bn Fondo Capital Infraestructura, which mostly invested in greenfield PPP projects, while Leautaud founded the I Cuadrada funds later sold to BlackRock, where he became head of infrastructure for Mexico and Latin America.

Their combined track record, they argue, mirrors exactly what they aim to replicate at MXM. “Our track record is fully aligned with what we’re trying to do,” Leautaud said. “It shows we’ve already done the ‘round trip’”

The two said they are in active, formal due diligence processes with three AFORES, Mexican pension funds, and expect additional institutional investors to come onboard soon. “We are aiming for a first close this summer,” Santoyo said.

They declined to name the pension funds, citing bilateral relationship protocols.

MXM will operate as private fund, not listed on local exchanges, taking advantage of regulations that allow Mexican institutional investors to deploy capital into private funds via their own public vehicles. This is a departure from the previously predominant CKD models they pioneered in their previous roles where those vehicles were listed on the BMV and BIVA stock exchanges and raised capital commitments from LPs on a rolling ‘per-investment opportunity’ basis.

Not traditional lending 

Although MXM is technically a debt fund, both founders insist that what sets them apart is their depth of experience in project structuring.

“We’re not a credit play. We’re a structuring play,” Santoyo said. “When we invest, we assume we’ll be in the project for 15 years.”

Leautaud added that their approach includes shaping the underlying projects themselves, not just the financing package. “When we say structuring, we mean both the transaction and the project. Early partnerships, technical definition, crafting the guarantees. This is a differentiated strategy,” he said.

MXM has identified more than 10 investment opportunities in its pipeline, ranging from MXN 300m to MXN 2.5bn. The fund would be open to co-investing for larger opportunities, the executives said.

Energy and transportation make up the most active sectors in the country. “The hottest sector today is energy,” Santoyo said, pointing to the federal government’s recently announced infrastructure plan, in which energy comprises 54% of federally-backed projects.

The firm is also evaluating renewable energy assets, including some of those participating in new tenders launched by Mexican government.

Hitting while the iron’s hot 

The current environment for private participation in infrastructure is the strongest it’s been in years, the execs said, citing the shift in tone under President Claudia Sheinbaum, who has shown support for private sector participation in infrastructure and energy projects.

“We believe the moment to invest in Mexican infrastructure is now,” Leautaud said. “The need is enormous, the project availability is growing, and returns will be there.”

The government has outlined MXN 5.6tn in infrastructure needs under its latest infrastructure plan that will require substantial private capital to realize Sheinbaum’s agenda.

MXM is targeting high teens returns at the project level — consistent with the performance of their past funds.

The fund’s legal structuring is being handled by the law firm Creel, García Cuéllar y Enríquez, which did not answer a request for comment.