Aureos Colombia Fund makes debut investment

The $35.8m fund has invested along with one of its portfolio companies in the management buyout of Colombian vehicle leasing company Rentandes.

Emerging markets private equity investor Aureos made its first investment in Colombia, participating in the management buyout of vehicle and machinery rental company Rentandes.

Rentandes specialises in the renting and fleet management services of automobiles, trucks, and construction machinery to Colombian companies.

Aureos invested an undisclosed amount of capital in Rentandes alongside portfolio company Financiera Arrendadora Centroamericana, a Nicaraguan financial leasing company.

Leasing is an attractive sector in a weak economy because many companies prefer to enter into long-term rental contacts as opposed to tying up capital in assets, Aureos said in a statement.

The proceeds from the MBO will be used by Bogota-based Rentandes to strengthen its balance sheet, expand its fleet of vehicles and pursue larger contracts.

Rentandes is the debut investment for the Aureos Colombia Fund, which collected $35.8 million in commitments from Colombian pension funds and insurance companies in October. The fund invests alongside the Aureos Latin America Fund that targets small and mid-size companies in Mexico, Central America, Peru and Colombia.

The Colombian company is the second of its type Aureos has invested in. Last May, Aureos purchased a controlling stake in Mexican transportation equipment leasing company Analistas de Recursos Globales for $5 million.

Analistas was the second investment out Aureos’s Latin America Fund since inception in December 2007. The fund, targeting $300 million, held a first close on $140 million in January 2008 for investments of between $2 million and $10 million.

The Latin America Fund’s first investment was the acquisition of a 31 percent stake in Mexico office equipment distributor Docuformas.

Aureos raised the $36.3 million Aureos Central America fund in 2002, and in 2006 was selected by the Inter-American Development Bank to manage the $21 million Emerge Central America Growth Fund.