Five Minutes with Steve Costabile

Mexico is the most industrialised country in Latin America by percent of GDP and presents attractive opportunities for fund of funds managers, says PineBridge's head of private funds group, Steve Costabile.

In what ways has PineBridge changed or refined its approach to private equity investing in the past year or so?

PineBridge is taking a look at what we’ve done well consistently and what has really been a global platform in the private markets. We’ve also had some targeted historical exposure to private equity from Central and Eastern Europe specifically and of course Asia. One could foresee that PineBridge would position itself for further development in Asia. We have a very particular point of view concerning China, not only with our legacy positioning but with our sponsorship with Pacific Century Group. [PineBridge is majority-owned by a subsidiary of Asia-based private investment group, Pacific Century].

Some of the newer geographies the firm is looking at include markets in Mexico and Africa. How would you categorize the opportunities to commit to managers in these areas?

In 2009, we were very interested in Mexico when no one was talking about the region and were the first to issue a pure fund of funds to be listed for the country’s pensions funds. We’re big believers in the region’s potential and think Mexico will be the largest economy in Latin America by 2020. Mexico is the most industrialised country in Latin America as measured by percent of GDP, even though Brazil’s earnings are larger overall.

In Africa, we have a direct private equity team out of Johannesburg and will leverage that team for more opportunities in the Sub-Saharan region. We gather a lot of intelligence from having an office in Nairobi, where our team has activities in listed equities and fixed income. We have excellent relationships with institutional capital in that region and when you marry that to our private equity direct activities that are already on the ground in South Africa, it is a nice foundation and framework to develop further strategies such as a multi-manager approach to Sub-Sahara African private equity. As we look at the region, for us it really comes down to Kenya, Uganda and Tanzania to private equity, South Africa of course has been a mainstay but most of those deals are more mature and larger. Both Ghana and Nigeria in West Africa also have tremendous activity and we think despite a lot of broad-based noise and headlines, underneath there is an economy and a regulatory regime that is favourable.

PineBridge has been present in Bahrain for just over a year. What is the opportunity set there and how much activity has come out of that office?

We have been focused on establishing the Bahrain office and serving the Middle East, North Africa and Turkey. Certainly PineBridge recognises the opportunity for investments in the region where value is underserved. PineBridge believes it is well-positioned for those opportunities in both equity and real estate.