The Mexican pension fund Afore Coppel has reached an agreement to acquire its competitor Invercap for 4.620 billion pesos (234.1 million euros). With this purchase, Coppel will exceed one trillion pesos (50.675 billion euros) in managed assets and will become the fifth largest pension manager in the country.
The transaction, revealed by "Bloomberg" after accessing internal documentation of the operation, will be paid entirely in cash and represents the first major integration in the sector since the merger between Metlife and Principal in 2018.
"We are pleased to inform that [the American private equity firm] Advent has agreed to sell Invercap, a Mexican retirement fund management company belonging to the portfolio of [the fund created by Advent] Lapef V, to Afore Coppel," Advent stated in a communication sent to its partners and reported by the Mexican newspaper "El Economista".
Lapef V will obtain around 145 million dollars (125 million euros) for the 62.2% of Invercap that it holds in its portfolio. This figure may be adjusted later based on the tax burden, the evolution of exchange rates, and other usual adjustments after the final closing of the operation.
According to the latest data from the National Commission of the Retirement Savings System (Consar), Afore Coppel currently manages 658.003 billion pesos (33.344 billion euros) from 12.1 million accounts, while Invercap manages 348.939 billion pesos (17.682 billion euros) distributed across 1.9 million accounts.
Mexican regulations establish that the afores, the retirement fund managers, cannot exceed a market share of 20% in the private pension system, unless they have explicit authorization from Consar to exceed that threshold.