ACON generates 2.3x return on InverCap

The investment firm’s Latin America Opportunities Fund III exited InverCap Holdings, whose assets under management grew 118% during ACON’s investment.

ACON Investments will exit InverCap Holdings three years after it acquired the consumer lending and insurance distribution company, sealing a 2.3x return multiple, according to a source with knowledge of the situation. 

ACON declined to disclose a return multiple and other financial details of the transaction. 

InverCap is actually buying out ACON’s remaining stake in the business, ACON told Private Equity International. Last November, the firm sold a piece of its stake in InverCap to Advent International.

The InverCap investment was held in ACON’s Latin America Opportunities Fund III, which closed in February 2011. The fund has deployed about $310 million so far in six portfolio companies in Mexico, Colombia, Brazil and Panama, ACON told PEI. This fund is ACON’s third pool of capital in the region. The previous pools of capital closed in 1996 and 2001 respectively. Both funds are fully realised, said ACON.  

InverCap’s main subsidiary, Afore InverCap, manages the retirement funds of more than one million customers and is the largest pension fund manager in Mexico. Since ACON’s investment, InverCap’s assets under management grew from 918,000 to 1.4 million. Its market share in the Mexican private pension fund system grew from 3.8 percent to 5.6 percent.

Washington-based ACON has a history of investing in Latin American mid-market companies. Founded in 1996, the firm focuses on infrastructure, retail, energy and financial services and has managed about $2.75 billion of capital. 

In the US, ACON recently closed its third fund on $751 million on 30 May, according to a filing with the US Securities and Exchange Commission. The fund exceeded its $600 million target and has already invested about 20 percent of it in three investments, Private Equity International reported earlier. The fund received commitments from the California State Teachers’ Retirement System and the New York State Teachers’ Retirement System, according to PEI’s Research & Analytics division.