Panel session: How can local LPs achieve portfolio diversification and deal with investment limits
Melvin Escudero, CEO, El Dorado Investments
There are limits in how much investors can allocate to the different asset classes. Some countries do not allow to invest in international private equity. Pension system in Latin America has grown around 15 to 20% on a yearly basis. So where do they invest all this new money? There were probably be a significant increase in international and local alternative products.
In a perfect world what type of allocation would there be to alternatives? Should there be a limit? In most Latin American countries there is a limit between 10 and 15%. These countries are trying to reach international standards and the current limits are almost full. In the next 5 to 10 years, these limits will probably be increased to around 20%.