Introduction to Afore Azteca and its Investment Approach
Eduardo Parra Ruiz, the general director of Afore Azteca, emphasizes the importance of diversification in their investment portfolio to offer the best returns to workers. Afore Azteca has significant positions in various infrastructure projects, including roads and electricity, but remains cautious.
Balancing Risk and Return
According to Parra, Afore Azteca’s investment strategy heavily favors diversification. He believes that diversification strikes a balance between risk and return, allowing them to “potenciar rendimientos” (maximize returns) by strategically allocating investments across different assets.
Maintaining Confidence Among Investors
Parra confirms that there is confidence in Mexico from both domestic and foreign investors, albeit with caution. He explains that while there are numerous projects and opportunities available, the challenge lies in ensuring that the risk-return equation remains aligned.
Thorough Project Analysis
Afore Azteca meticulously evaluates potential infrastructure projects by assessing their feasibility and calculating the expected returns. Parra highlights that analyzing complex projects requires considering various scenarios, including potential delays and cost overruns.
Focus on Diversified Investments
Afore Azteca participates in infrastructure through multiple instruments, including real estate investment trusts (Fibras), government debt, and Certificados Bursátiles Fiduciarios de Proyectos de Inversión (Cerpis).
Fibras: A Key Component of Diversification
Parra mentions that approximately 67% of Afore Azteca’s resources are invested in Fibras, which are attractive due to their stabilized nature and consistent cash flow generation. These investments have contributed to the development of various regions in Mexico, driven by logistical, industrial, or commercial factors.
Maximizing Returns for Clients
Parra prioritizes delivering higher returns to clients by investing in Fibras, Cerpis, and other alternative instruments such as debt, private equity, infrastructure, and real estate. Afore Azteca has allocated around 20% of its resources to corporate debt.
Afore Azteca’s Market Position
With approximately 370,000 million pesos under management (around 4% of the market), Afore Azteca ranks eighth in terms of managed assets and first in returns for the year, according to Parra.
Key Questions and Answers
- What is Afore Azteca’s investment approach? Afore Azteca prioritizes diversification to balance risk and return, investing in various assets such as Fibras, government debt, and Cerpis.
- Why is diversification important for Afore Azteca? Diversification allows Afore Azteca to optimize returns by strategically allocating investments across different assets, mitigating risks associated with individual investments.
- How does Afore Azteca evaluate infrastructure projects? Afore Azteca conducts thorough project analysis, considering factors such as feasibility and expected returns while accounting for potential delays and cost overruns.
- What percentage of Afore Azteca’s resources are invested in Fibras? Approximately 67% of Afore Azteca’s resources are invested in Fibras.
- What is Afore Azteca’s market position? Afore Azteca manages around 370,000 million pesos and ranks first in returns for the year.
