Latin America Enterprise Fund Managers L.L.C. is one of the pioneers in managing private equity funds in Latin America with USD 783 million of cumulative committed resources since 1995 (6 funds). LAEFM Colombia Ltda. is a subsidiary of LAEFM and manages funds which invest in priority sectors of the Colombian economy, hydrocarbons and forestry.

CIHF

Colombian Investment in Hydrocarbons Fund (CIHF): The committed resources by the investors were USD 350 million to invest in hydrocarbon exploration and production projects in association with specialized operators.

The Colombian Investment in Hydrocarbons Fund was the first private equity fund established in the country. The Fund consisted of three funds: Fund I USD 62 million (started operations in 2005), Fund II USD 67 million (started operations in 2008), and Fund III USD 220 million (started operations in 2010).

The Fund’s investment strategy was to joint venture with specialized operators of the sector that had contracts with the National Hydrocarbons Agency and/or Ecopetrol in national blocks and that were interested in exploring and developing these blocks with a financial partner.

The internal rates of return to investors after costs, expenses, and carried interest in United States dollars were of 15% Fund I, 18% Fund II, and 19% Fund III. The exit transaction from all the projects of the Fund obtained the “Most Successful Transaction” award, granted by the Colombian Private Equity Association (ColCapital), due to its high profitability, amount, and for being the first fund in the country to complete the investment cycle (invest, grow, and exit).

Generally, the Fund had a participation of around 30% in the projects. The Fund’s resources were used to finance seismic surveys and/or drilling of an exploratory well in the identified prospect. If it was successful, the Fund continued to drill several delimitation wells and development wells depending on the size of the deposit, as well as, building the infrastructure production facilities required to obtain the production benefits.