In light of a landmark energy reform that overhauled Mexico’s energy sector, the National Pension System Commission (CONSAR) has consistently amended its regulations, including the sole financial guidelines, in an effort to increase investments carried out by Mexican pension funds (AFORES or Administradoras de Fondos de Ahorro para el Retiro) in other asset classes, such as CERPIs.

CERPIs are certificates offered through the Mexican Stock Exchange by means of a Mexican issuing trust to finance or invest in certain projects in Mexico.  These are a new breed of asset class created as an alternative to the existing certificates for capital development or CKDs. Only institutional and qualified investors under Mexican law can purchase CERPIs.

Due to recently enacted regulations, AFORES must now follow specific guidelines when selecting investments in CERPIs, including their co-investors. As part of the new guidelines, the AFORES’ investment committee must now verify that:

a) The structure involves a parallel vehicle or co-investor, which must invest in the same projects as the issuing trust. The co-investor (traditionally the sponsor) shall represent at least 30% of the value of the investment or financed project. The co-investor may invest through the acquisition of certificates issued by the issuing trust;

b) Funds received from the CERPI issuance must be invested directly or through investment vehicles in Mexico;

c) In the event of judicial opposition by the holders of the CERPIs, the issuing trust must provide for an obligation from the fund manager/sponsor to cease the investment; and

d) The issuing trust must provide that the manager/sponsor, regardless of whether it is a financial institution, must protect the interests of the investors and act for their benefit at all times.

In the event the CERPI complies with the AFORES’ guidelines, the AFORES’ committees must verify, among others, the eligibility criteria for co-investors. In addition to investment eligibility criteria (which was already applicable to AFORES for other type of investments such as CKDs), the CONSAR introduced more procedures when pension funds intend to purchase the certificates since this asset class is intended to grant the manager/sponsor with more control over the issuing trust.

As a result of the above, the AFORES are now permitted to actively invest and participate in CERPI issuances, to finance or invest in long-term projects in Mexico and at the same time allow the manager/sponsor to invest resources obtained from the issuance more freely. Investments in CERPIs are expected to produce higher yields than traditional investment vehicles. These changes are part of a new trend in Mexico’s capital markets. Mexican financial regulatory bodies are re-evaluating many of their regulations to allow other financial entities to invest in long-term projects with higher yields, creating more movement in the country’s economy.


Lorenzo Ruiz de Velasco-Beam is a partner in the Firm’s Corporate/M&A Practice Group in Mexico City. He has more than 15 years of experience advising on corporate and cross-border financial transactions, M&A projects, negotiations, divestitures and capital market matters.


Aidé Banda-Mendoza is a member of the Firm's Banking and Finance Practice Group in the Monterrey office and also participates in the Corporate Practice Group. She advises local and international clients on the implementation and structuring of financial transactions.