A New Capital Fund for Fintech Companies in Colombia that Offer Loans

Santiago García, president of the pension and severance fund Skandia, presented Impacto, the first private equity fund in Colombia that combines data analytics and technology to make available to investors an alternative vehicle, which impacts the credit fintech ecosystem and Colombians with limited access to financing that these entities offer.

According to the executive, it is one of the first funds in the country to include ESG metrics (Environmental, Social, and Corporate Governance criteria), allowing it to articulate the investment to social objectives and agendas.

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How did the idea of presenting and managing an equity fund for fintech companies that offer credit come about?

Impacto is the first private equity fund focused on credit fintech companies in Colombia and Mexico. It offers a double benefit, with attractive returns for investors and social impact to the extent that it becomes an enabler of fintech companies that democratize credit in Latin America. These are products that were not available to ordinary citizens. While, with this one, you can enter with investments starting at $5 million.

It is a fund offered by Fiduciaria Skandia, in alliance with the U.S. manager Accial Capital Management, with an expectation of good results and aiming at a return rate of the IPC plus 7 or 10 percentage points, which would be between 15 and 17%.

What other characteristics does the fund have?

It is designed for medium- and long-term investors, for three, four, and five years. The performance is not related to stocks or traditional financial markets. In addition, it helps diversify and enhance portfolios.

Return distributions will be quarterly or semi-annually. The fund builds a portfolio to lend to fintechs that offer credit to individuals or other SMEs, and the money, in addition to profitability, also generates social impacts.

Additionally, it is a fund that has ambitious goals for 3 and 5 years. In the first year to have a size of $50,000 million to $100,000 million and even reach $500,000 million. Skandia puts a seed capital of $25 billion because we believe in that.

How have you fared with the volatility of the dollar and stock markets?

This year has been quite volatile, as international equities and fixed income have been pressured by interest rate increases in all countries and especially in the United States.

But investments in the financial market are long-term, although in spite of that, results continue to be positive. These moments of entry are attractive because interesting opportunities are created. Rates are attractive and for the long term, the valuations are interesting.

What do you think of the ideas that Gustavo Petro has put forward as a candidate and now as president regarding future pension reform?

It is an issue that we are working on hand in hand with the association, but there is no real project to be able to make a statement. What we have done is to invite the government and the actors to create technical tables to analyze with great rigor, because what is at stake are the resources of pensioners and members of the system.

The current pension model is susceptible to improvement and scope, but the important thing is that the system is sustainable and that it does not endanger the future pensions of young people by generating benefits in the short term.

These working groups must be technical and rigorous, and I repeat, they must focus on protecting the savings of the youngest.

What are the international experiences that have been presented in terms of pension reform?

China is already moving in that direction, with models of individual capitalization, in which each person builds his savings and there is some element of solidarity for those who could not contribute or did not have a stable job that would allow them to build a savings base.

Here in Colombia, the minimum pension guarantee fund model is positive, but the world is definitely moving towards this individually funded model.

However, it is also necessary to recognize that a mandatory pension system is not enough and it is necessary to balance or complement it with voluntary savings systems.

In the United States there are many mechanisms for saving and with tax benefits and also to stimulate it from the companies; this complement is important, in which employees and employers participate.

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(Featured image by QuinceCreative via Pixabay)

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First published in Portafolio, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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