Aureos Latin America Fund and URBI Establish an Investment Scheme to Promote Low-Income Housing in Mexico

LONDON, July 6 /PRNewswire-FirstCall/ -- The Aureos Latin American Fund (ALAF)(1), one of the funds managed by Aureos Capital, has agreed to launch an innovative investment scheme with URBI, one of the leading home-developers in Mexico, to promote and finance low-income housing in Mexico.

Aureos Capital is a leading private equity fund management company specialising in investing in small to medium-sized businesses in emerging markets.

The scheme will provide low-income housing through both traditional mortgages and the Alternativa URBI program. URBI's Rent-to-Own program provides access to housing to non-wage earners, who represent over 50% of Mexico's economically active population, and who do not typically have access to a traditional mortgage.

Miguel Olea, Managing Partner of Aureos Mexico, comments: "Aureos has extensive experience managing private equity funds across Asia, Africa and Latin America; now with URBI, we have created a new exciting investment scheme, focused on new market niches, that is the only one of its type in Mexico."

"URBI is a leader in low-income housing, and this partnership applies its experience and expertise in the management of innovative schemes aimed at workers not affiliated to Infonavit or Fovissste, the country's government sponsored housing agencies."

Mr. Olea explains that URBI's prestige and track record includes over seven years' experience in financing schemes for non-wage earners, its adherence to strict corporate governance standards and novel risk management models. Due to its sound origination and collection methods, URBI has developed, in conjunction with credit agencies, responsible clients with payment capabilities that are deeply rooted to their homes once they have obtained their mortgage.

Erik Peterson, Regional Managing Partner for Aureos in Latin America, said: "This scheme represents an excellent opportunity to invest in the low-income sector in a more efficient and profitable way. It also broadens the opportunity for foreign investors to enter a sector that has generally been dominated by domestic investors."

For the first phase, ALAF has created a trust that will manage a housing volume representing 12% to 15% of URBI's projected revenues over the next 4 years; thanks to its more rapid asset turnover, the trust will have a more rapid expansion of its capital base.

Cuauhtemoc Perez, CEO of URBI, comments: "It is a great accomplishment to participate with ALAF, who will provide its expertise in innovative investment schemes in emerging countries. Its participation will allow for an equity injection in the low-income housing segment, a strategic sector and a driver of Mexico's economy."

"Through ALAF, the investment of important investors including multilateral institutions like the IFC and CAF, institutional investors like CDC of the United Kingdom, Bancoldex of Colombia and FMO of the Netherlands, Colombian insurance companies and pension funds, as well as Mexico's Corporacion Mexicana de Inversiones de Capital, CMIC, will reach this key sector."

Alternativa URBI mortgages will be granted by Sociedad Hipotecaria Federal (Mexican Federal Mortgage Agency - "SHF") through its network of financial affiliates, and shortly through Infonavit, in line with the analysis and proposals that are currently under development for workers that do not have immediate access to a mortgage.

Javier Gavito, CEO of  Sociedad Hipotecaria Federal, comments: "The participation of private equity is important in the Rent-to-Own program, which is part of the agreement, as it promotes alternate financing options targeted to non-wage earners, a priority for SHF. It also contributes to increase the possibilities of accessing a home, offering both a better product and service to Mexican citizens."

Selene Avalos, URBI's CFO, concludes: "We have found in ALAF the best partner for our traditional mortgage program and our innovative scheme, Alternativa URBI. With their participation, we have put in place a funding mechanism that will strengthen our balance sheet with the financing required during the mortgage qualification period of the homebuyer; increasing URBI's free cash-flow generation, in line with our business plan for 2010, and allowing us to fully deploy our operating capabilities without affecting our financial position."

    
    
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AUREOS CAPITAL LTD

Aureos Latin America Fund (ALAF)(2) is one of the funds of Aureos Capital. Aureos Capital Ltd is a private equity fund management company which specialises in providing expansion and buy-out capital to unlisted mid-cap businesses across Asia, Africa and Latin America.

Since its establishment in 2001, Aureos has increased its funds under management to over US$ 1.2 billion and extended its geographical footprint to over 50 emerging markets covering Asia, Africa and Latin America, by establishing 16 regional private equity funds.

Investors in Aureos funds include institutional investors, bilateral and multilateral development finance institutions, pension funds, sovereign wealth funds, fund of funds, family offices and foundations and high net worth individuals.

URBI

Urbi Desarrollos Urbanos S.A.B. de C.V. (BMV: URBI*) is a leading housing developer in Mexico.  At the moment, URBI is active in 31 cities including the largest metropolitan areas and the most dynamic medium-sized cities in the country. In its 28 years of existence, URBI has built more than 340,000 houses, and has been listed on the Mexican Stock Exchange since 2004.

(original in english)

(1) ALAF: Aureos Latin America Fund I, Aureos Latin America Fund II and Fondo Aureos Colombia

(2) ALAF: Aureos Latin America Fund I, Aureos Latin America Fund II and Fondo Aureos Colombia

SOURCE Urbi Desarrollos Urbanos S.A.B. de C.V.