Transcript Mexico National Advisory Board SIIT by Rodrigo Villar (Power Point

Mexico’s National Advisory Board
to the Social Impact Investment
Taskforce
July 9th, 2015
London, UK
Mexico: A Prominent Global Player
Latin America’s second largest economy
• US$ 1.18T in GDP
• 120M population
• US$ 9,800 GDP per capita
• 3rd largest US trading partner, US$ 500B in 2013
Sound macroeconomic context
• Fiscal deficit under control: -4%
• Moderate debt to GDP ratio: 46%
‒ Well below Brazil, India, and the US
• Strong fundamentals reflected in credit ratings and pricing
‒ BBB+ S&P rating
‒ <100 5-year CDS Spread
• Boom in foreign investment since 2008-09 recession
• Low inflation and a strong currency make Mexico a more
attractive foreign capital destination than many of its global
peers
• 1.4% inflation and currency risk
• 2.1% country credit risk
Sources: Mexico: Different Investment Lens Required, By Henry H. McVey, Head of Global Macro & Asset Allocation, And Vance Serchuk, Executive
Director of the KKR Global Institute, 2014; UN statistics
2
However, highly contrasting development paces
High Human Development…
United States
… But High Inequality
0.914
United Kingdom
Colombia
53.5
Brazil
52.7
0.892
Turkey
0.759
Mexico
Mexico
0.756
United States
Brazil
0.744
Turkey
China
0.719
United Kingdom
Colombia
0.711
China
India
0.586
0
0.2
0.4
41.1
40
38
37
India
0.6
0.8
1
Med
ium
33.6
0
Human Development Index
Low
48.1
10
20
30
40
50
60
GINI index
H
i
g
h
Very
High
0
Perfect
equality
100
Perfect
inequality
Note: Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an
economy deviates from a perfectly equal distribution. Sources: UN statistics, World Bank
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Great Opportunities Lay Ahead
McKinsey has called Mexico a two-speed economy moving in opposite directions
• A highly productive modern economy that is flourishing and competing globally
• A traditional, often informal economy where productivity is plunging
Great gaps in basic social services represent market opportunity for social enterprises…
• Health, education, affordable housing, financial inclusion, access to water, among others
… As well as opportunities in urban and environmental development
• According to the World Bank, Mexico has a challenge to make urban development more
environment-friendly, efficient and resilient to climate change, as well as socially inclusive
Overall, positive macroeconomic outlook
• Structural reforms could increase GDP growth from 2.8% to 4.5%
• Working population will peak in 2042
• Geographic and economic diversity
Sources: Mexico: Different Investment Lens Required, By Henry H. McVey, Head of Global Macro & Asset Allocation, And Vance Serchuk, Executive
Director of the KKR Global Institute, 2014; UN statistics; A tale of two Mexicos: Growth and prosperity in a two-speed economy, McKinsey Global
Institute, 2014; UNDP statistics; World Bank
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Flourishing Impact Investment Ecosystem
Out of US$ 10.6B capital committed to impact investment globally, approx. 11% or US$ 1.2B
has been committed to Latin America
• After Brazil, Mexico has captured the largest amount, south of US$ 300M
Impact investing in Latin America is still in early stages, or “Marketplace Building” phase
• Fast growth of industry players, hubs of activity begin to develop, supporting institutions
form, higher competition
• Main hubs of activity are Sao Paulo, Mexico City and Bogota
Burgeoning ecosystem includes a range of local and international funds focused on a variety of
sectors
• Most popular topics include housing, education, agriculture, financial inclusion, health,
sustainability, entrepreneurship, among others
Range of challenges remain a focus of regional players
• Sourcing investment opportunities, difficulty in measuring impact, finding suitable exit
opportunities, lack of supporting institutions
Sources: Eyes on the Horizon, The Impact Investor Survey, GIIN and JP Morgan, 2015; State of Impact Investing in Latin America, Bain & Company, 2014
5
Mexico – An Active Player
A robust Mexican ecosystem built over the last 5 years supporting impact investment initiatives
• Over 514 organizations identified involved in impact investment initiatives, including
– 25 funding organizations
– 31 accelerators and incubators
– 22 corporations
– 10 government agencies
– 13 foundations
– 17 universities and research centers
– 29 consultants and other service providers
Latin American Impact Investing Forum based in Mexico has become the most important
gathering in the region
• Over 420 attendees representing funds, foundations, entrepreneurs, accelerators,
consultants, NGOs, corporations, government agencies, multilateral organizations,
academics, investors, among others
• 24 countries represented from Latin America, North America, the European Union, Asia and
Africa
Sources: Eyes on the Horizon, The Impact Investor Survey, GIIN and JP Morgan, 2015; State of Impact Investing in Latin America, Bain & Company, 2014;
GIIMAP – Mexican Impact Investment Sector Mapping, 2013
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Mexico’s National Advisory Board to the Social
Impact Investment Taskforce Members
Rodrigo Villar
• Founder and CEO at New Ventures
• President of Mexico’s Advisory Board
• Represents most important platform that
catalyses impact entrepreneurs
Juan Sandoval
• Managing Director Venture Capital Fund
at Nacional Monte de Piedad
• Represents country’s largest foundation and
its impact fund
Francisco Martínez
• Environmental Sustainability Officer, FEMSA
• Represents one of largest bottler franchises
of Coca-Cola products in the world and
fosters its development initiatives
Katia Dumont
• Mexico and Central America’s Chapter
Manager at The Aspen Network of
Development Entrepreneurs (ANDE)
• Coordinates member initiatives
Fulvia Morales
• Fomento Social Banamex (Citibank)
• Represents the foundation of one of the
country’s largest banks and fosters its impact
initiatives
Miguel Laporta
• Head of Corporate Sustainability at HSBC
Mexico and Latin America
• Leads one of the country’s largest banks
impact initiatives
Juan Carlos Domenzain
• Co-Founder and CEO at Promotora Social
México
• Represents pioneer risk philanthropy
organization
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Simple But Ambitious Two-fold Agenda
Domestic Agenda
1.
2.
3.
Strengthen the impact investment
ecosystem
• Continue to actively engage new
players
Promote the impact investment ecosystem
• Disseminate content and educate
relevant players and organisations
Influence public policy
• Foster dialogue between public,
private and civil sector organisations
Internal Agenda
1.
2.
Internalise the key ideas surrounding impact
investment
• Share, adapt and implement ideas
discussed at the Global Steering
Committee
Share best practices with the international
community
• Put forward the Mexican case, using
insights and best practices learnt to
foster collaboration among countries
8
Thank you
9