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– These vehicles channel institutional savings into PPP projects through long-term financing in local currency. In addition to mobilising resources, they help standardise risks, strengthen governance, and build a more robust financial ecosystem for infrastructure development in the region.
CARACAS, Venezuela – CAF-AM’s flagship funds are long-term closed-end investment funds that channel institutional capital into public infrastructure projects developed under PPP schemes. Through project finance strategies backed by stable and predictable cash flows—often associated with availability payment mechanisms—these vehicles offer financing in local currency, with terms aligned with the useful life of the assets and on terms that are competitive with traditional financing alternatives.
Their objective is to bridge a structural gap present in many markets across the region: the difficulty of accessing long-term financing in local currency for the development of infrastructure projects. This need has begun to be explicitly recognised in various Latin American countries, where fiscal constraints and the limitations of traditional private financing have driven the search for new infrastructure structuring models that view the private sector as a source of financing and, in turn, require specialised instruments.
One of the greatest challenges associated with infrastructure projects often relates to how to transform initiatives into assets and how to enable them to attract institutional capital on a sustained basis. This is where flagship funds come into play.
Unlike other financing structures, these vehicles are designed to operate at scale. Their purpose is not merely to finance specific projects, but to build investment platforms capable of channeling resources toward multiple assets based on consistent criteria for risk, governance, and performance.
This characteristic is particularly relevant in Latin America. The region continues to face significant infrastructure gaps and, at the same time, holds substantial volumes of institutional savings managed by pension funds, insurance companies, and other long-term investors. However, the connection between these two worlds remains limited. Projects often lack the scale, standardisation, or financial structure necessary to meet the requirements of these investors.
CAF-AM’s flagship funds seek to bridge this gap through an investment strategy and professional management that result in appropriate asset aggregation, efficient risk diversification, and robust standardised governance frameworks. This helps lower barriers to entry for institutional investors and generate performance track records that facilitate new capital allocations.
Their contribution, however, goes beyond financing. By demonstrating that it is possible to channel institutional savings into infrastructure under competitive terms, these vehicles help expand the sources of financing available to the sector and build capabilities that can be replicated by other actors.
From this perspective, the value of a flagship fund is not measured solely by the resources it mobilises or the projects it finances. It is also reflected in its ability to strengthen the financial ecosystem that enables long-term infrastructure development.
