Nexxus Capital, a Mexico City-based private equity (PE) firm, plans to launch two or three search funds said Chairman and Senior Managing Partner Arturo Saval. It is also raising money to build industrial real estate projects.

The PE firm is opting for new search funds instead of a traditional growth fund, he said.

Nexxus plans to launch the new search funds, which will target companies in the health, education, and consumer services sectors, later this year, Saval said. Investment tickets could range from USD 20m to USD 50m, he noted.

According to Saval, the advantage of these vehicles is that investors know exactly which company they are investing in. He noted that it is much more difficult for investors to commit money to a fund where the underlying companies are unknown. With traditional growth funds, he added, investors must trust GPs to pick the right investments for four or five years.

Nexxus is also venturing into the industrial real estate space following its October acquisition of Prosperity RealEstate, a developer and operator of industrial real estate, Saval said. The PE firm is raising USD 150m-USD 200m to build new manufacturing facilities to take advantage of nearshoring, or placing production closer to consumers and end users, he noted. It has already invested USD 45m in this strategy, including the acquisition of Queretaro, Queretaro-based Prosperity.

There is an increasing demand for nearshore assets in Mexico and beyond, panelists said in December at Mergermarket’s inaugural M&A forum in Miami.

Portfolio management 

Nexxus does not plan to exit its investments in Immunotec, a wellness products direct seller and Mexico City-based transportation and logistics company Traxion [BMV:TRAXION] this year, Saval said.

The PE firm owns a 9.4% stake in Traxion, which has a market cap of MXN 17.9bn (USD 1bn), and 77.6% in Immunotec, according to financial filings.

On the other hand, Nexxus expects to announce the sale of Mexico City-based steakhouse restaurant chain La Mansion in the following weeks, he said. It is the last remaining asset in its restaurant platform Taco Holding, he added. In September 2022, it sold Carl’s Jr master franchise for Mexico City and the surrounding area to Alta Growth Capital. In 2020 it sold taco restaurant chain El Farolito to Grupo Gigante and in 2019 it sold Krispy Kreme Mexico to Krispy Kreme Doughnut.

The sale of La Mansion would mark the end of Taco Holding, which at some point Nexxus planned to take public, as reported.

The PE firm also plans to exit Mexico City-based clothing vendor Modatelas, he said. Nexxus first invested in the company in 2012, according to its website. Nexxus owns a 29.4% in Modatelas, according to financial filings.

Nexxus also expects to exit AgileThought [NASDAQ:AGIL], Irving, Texas-based computer services company, this month, Saval said.

AgileThought, which went public in 2021 through a SPAC, entered a Chapter 11 reorganization process in August with a stalking horse bid and financing from Blue Torch Finance to support its operations. In December, it received a court order approving a USD 75m sale of its assets to New York-based Blue Torch, after canceling in November an auction for its assets due to not receiving additional offers, according to sister publication Debtwire. In January, AgileThought asked its bankruptcy judge to dismiss the Chapter 11 cases of most of its co-debtor affiliates.

Saval did not comment on the AgileThought Chapter 11 reorganization process.

Asked about reports of Nexxus considering a sale of Mexico City-based concrete pumping services provider Pumping Team, Saval said the PE firm is not urgently looking for an exit but is evaluating a potential sale of the company as a whole or its operations in Mexico and Spain independently. A deal could take place by year-end or in 2025, he noted.

In May 2022, Spanish newspaper reported, citing market sources, that Nexxus and Pumping Team’s other sponsor, MCH, had hired Alantra as financial advisor to launch the sale of the concrete pumping services provider. Saval confirmed a financial advisor has been hired.

On the debt side, Nexxus plans to raise a new debt fund in 2Q24 or 3Q24, Saval said. The fund will be similar in size to the Mezzanine Fund I [BIVA:NXXMFCK], which launched in 2018 and raised a total of MXN 3.5bn (USD 174.7m), he added.

Mergermarket reported in June 2022 that the PE firm planned to raise the new debt fund by year-end.

Nexxus Iberia 

Nexxus Iberia, the PE firm’s joint venture with Spanish real estate investor Maite Ballester, is working on three new investments in the Iberian region through its second fund, Nexxus Private Equity Fund II, and expects to close the deals before the summer, Saval said. Targets operate in the tourism and mid-age wellness services sectors, he added.

In November 2023, Nexxus Iberia announced the first EUR 23m (USD 25m) close of Nexxus Private Equity Fund II.

Nexxus Iberia continues to work on exiting investments from its first fund Nexxus Iberia I fund, including TwentyFour Seven (24/7), a Madrid-based TV and photo production company, he said.

It has completed five exits with the sale of logistics company Maresa, health consulting firm Bienzobas, health clinic Dorsia, and oncology solutions specialist company Mercuris, according to its website.