Ariel Blumenkranc, a partner in Advent’s Mexico City office, highlights how the country’s unique business landscape and rising digital innovation are creating exceptional prospects for forward-looking investors.
Why is Mexico an interesting market for Advent?
Mexico is a very interesting market for us. It’s a large economy with strong growth in our sub-sectors of focus. We see opportunities coming from two key areas: family businesses looking for a partner to help them accelerate their growth, and multinationals looking to carve out subsidiaries. Both create great opportunities for us to add value.
What emerging trends are shaping the investment landscape in Mexico right now?
There are several. First, market and geopolitical volatility is creating opportunities as companies reassess portfolios and families look to diversify risk. Second, US companies are increasingly looking to expand their supplier base in Mexico and across Latin America. And third, technology is a powerful horizontal enabler of productivity and transformation across industries.
Mexico also has some unique dynamics. For example, healthcare is largely an out-of-pocket market, which creates strong demand for reasonably priced generics and branded generics medicine. In financial services, banking penetration remains low, so digital transformation is a relevant opportunity.
How do some of these trends compare to those in other regions globally?
There are some unique aspects to the Mexican market. For example, unlike many other regions, healthcare in Mexico is primarily an “out-of-pocket” market. This means consumers are the key decision-makers, and we see strong opportunities in the generics and branded generics space, where price-conscious customers are looking for quality options at reasonable prices.
In financial services, banking service penetration remains low, while technology is rapidly driving change in the industry. In business services, we’re seeing more openness from international players looking to supply digital transformation solutions from Latin America, given the good quality and shared time zone with the US.
You mentioned carve-outs, earlier. How do you think about these types of deals?
We put a lot of focus on positioning ourselves as the preferred partner for carve-outs. This means developing long-term relationships with both multinationals and management teams, acting as their thought partners. Having deep sector expertise and experience in carving out assets is crucial to delivering seamless deals and gaining conviction on our value creation plans. Somar is a great example, as it’s a combination of two large carve-outs from different publicly traded global companies.
Finally, what’s the most impactful lesson you’ve learned in your career at Advent?
The value of global collaboration. At Advent, we’ve completed hundreds of deals across our focus sectors. Sharing those experiences – the wins as well as the scars – is incredibly important. Leveraging Advent’s global knowledge base and resources is one of the key reasons we’re able to succeed in markets like Mexico.
