Sao Paulo — Patria Investimentos has made another move to strengthen its presence in Latin America’s infrastructure sector, acquiring a highway project in Colombia. This marks the firm’s third highway concession in the country, bringing its total committed capital expenditure (capex) in Colombia to $1.2 billion.
“We’ve become one of the largest private equity and infrastructure investors in Colombia. This capex figure demonstrates how committed we are to projects in the country,” said Roberto Cerdeira, the partner responsible for managing Patria’s infrastructure companies, in an interview with Bloomberg Línea.
The “Pacífico 3″ concession is a mature highway project that was initially granted to the private sector in 2014, to a consortium consisting of construction firms Construcciones del Cóndor, MHC, and Meco.
According to Cerdeira, all the expansion work has already been completed. “Now, we’ll focus on operating and maintaining the highway for the remaining 21 years of the contract,” he explained.
Strategic Importance of the Project
The project involves a highway that connects the central region of Colombia to one of the country’s key ports, Buenaventura. The 146-kilometer route passes through 19 municipalities.
“The project operates under a public-private partnership (PPP) model with a very secure structure. Since Colombian highways typically don’t generate enough traffic to be sustained by tolls alone, in addition to toll revenue, there’s an annual fixed payment from the government,” Cerdeira noted.
“A portion of the payment is made in US dollars, and another part is in local currency. If toll revenues fall below a certain minimum, the government guarantees that amount. It’s an attractive risk profile.”
With this acquisition, Patria now holds three highway concessions in Colombia and four in Brazil, totaling 4,000 kilometers of operations. Patria’s last highway investment came in August of last year when it acquired lot 1 in Paraná's auction, marking its first federal highway in Brazil.
“Whenever we assess infrastructure projects, we look for locations where contracts have clear rules and the regulatory body is mature and technical. We’ve seen that not only in Brazil but also in Colombia. The Pacífico 3 acquisition is a continuation of what we’ve been building there,” Cerdeira said.
In June, Patria announced the purchase of Colombian asset manager Nexus Capital, as part of its strategic growth plan in real estate. The transaction amount wasn’t disclosed.
Nexus Capital manages around $800 million in assets. Once the transaction is finalized, expected by the third quarter of 2024, Patria’s assets under management (AUM) in Colombia will reach $2.2 billion, according to the announcement at the time.
Expanding in Latin America
Patria currently manages approximately $43 billion in assets. According to Cerdeira, Patria’s alternative asset mandate in infrastructure spans across Latin America, but generally, the assets evaluated share similar characteristics: they are located in stable business environments and are part of well-structured concession programs.
“We look at energy, logistics, data infrastructure, and environmental services. We’re open to opportunities across all these verticals in Brazil, and we’re also exploring options outside the country. The challenge is finding the right fit for our profile,” he said.
Cerdeira added that the infrastructure focus also extends to mergers and acquisitions. “We’re open to M&A opportunities. Of the seven highways we currently manage, three entered our portfolio through acquisitions.”
He noted that Patria consistently takes a conservative approach when selecting infrastructure assets. “Regardless of macroeconomic assumptions or political scenarios, we always have a long-term perspective, as infrastructure contracts typically span 30 years. Interest rates will fluctuate, and political issues will arise,” he observed.
Cerdeira emphasized that proper regulation and strong contracts will always be critical factors when expanding the portfolio. “If the asset has solid fundamentals, we’ll be interested. We’ll continue investing in the region.”
