Southern Cross targets $1.75 bln for Fund V

  • El Paso Firemen & Policemen backs vehicle for $8 mln
  • LatAm specialist has holdings in Chile, Mexico 
  • Previous Southern Cross funds netting between 6 to 8 pct IRR 

El Paso Firemen & Policemen committed up to $8 million to Southern Cross Latin America Private Equity Fund V at its Aug. 19 meeting, Austin said. He declined to provide any additional detail about the fund.

Southern Cross invests in businesses throughout Latin America, often acquiring companies facing difficulties with their capital structures, according to its website. Its portfolio includes interests in Chilean power generator Eagle, internet & media company Grupo Expansión and Casas Javer, a Mexican homebuilding business.

The firm’s $1.7 billion 2010 vintage fund was netting a 6.88 percent internal rate of return as of Dec. 31, according to Washington State Investment Board documents. Fund III, a $751 million vehicle raised in 2007, netted 7.9 percent IRR and 1.4x multiple as of the same date, according to California Public Employees’ Retirement System’s website.

Norberto Morita and Ricardo Rodriguez founded the firm in 1998. Southern Cross has offices in Buenos Aires, São Paulo, Santiago, Bogotá, Mexico City, Montevideo, Uruguay and Miami Beach, Florida.

Southern Cross did not respond to a request for comment.

Foreign exposure

El Paso Firemen & Policemen’s commitment to Southern Cross represents its first allocation to a Latin American private equity fund, according to Buyouts analysis of its portfolio.

The $1.2 billion pension valued its private equity portfolio at a little more than $44 million as of June 30, according to system documents. It has a 3.44 percent allocation to the asset class.

Despite its size, El Paso Firemen & Policemen has developed a robust private equity program in recent years, having found its way into highly sought-after funds managed by firms like Blackstone Group, Vista Equity Partners and Centerbridge Partners.

The bulk of its recent commitments have gone to middle market funds, including Charlesbank Equity Fund VIII, Veritas Capital Fund V and Vista Equity Partners V, according to pension documents.