an alternative world of real estate investing possibilities Emerging Real Estate Markets an alternative world of real estate investing possibilities Emerging Real Estate Markets

OVERVIEW

Imagine going back in time to an economic environment similar to that of the 1960s in the United States but with the insight and capital resources of 2021. That’s what it’s like investing in the emerging real estate market of Mexico. As a San Francisco based private equity firm, Toltec Capital brings a depth of financing insight and capital to the Mexican residential real estate market.

What makes Mexico an attractive real estate market is the lack of competition from institutional investors. Unlike the United States and especially California – the marketplace is virtually devoid of real estate ETFs, REITs, venture capital firms, hedge funds, and IPO offerings. Because of this, Mexico’s real estate finance landscape is similar to what it was in the United States in the 1960s.

Emerging markets, by their nature, are in the early stages of developing institutional investment pathways. They lack the experience, expertise, and capital resources of developed markets. The world index of “ease of doing business” ranks Mexico in the 60th position and the United States in the 6th position. This reflects the intellectual capital gap between the two markets and an opportunity to benefit from.

Population Fundamentals make Mexico a Significant Real Estate Investment Marketplace

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As of December 31, 2020

Mexico’s growing middle-class continues to drive demand for new residential real estate, even in a covid-19 economy. Unlike in the United States, homeownership is a constitutional right specified in the 1917 Mexican constitution. Social programs like INFONAVIT and COFINAVIT (for the general population), as well as FOVISSSTE (for government employees), ensure that all working adults have access to a home mortgage.

The high demand for affordable housing coupled with government sponsored mortgages and deficiencies in intellectual and financial capital in the marketplace makes this market an ideal investment pathway for Toltec Capital and its investment partners.

INVESTMENT FOCUS

Through in-house development projects, financing of small-cap real estate developers, and secondary investments in index funds – the firm generates gains from a diversified but concentrated array of investment pathways. It is an investment focus guided by foresight and experience.

An artist is paid not for his labor but for his vision. The same can be said about asset management.

Apart from capitalization strength, it is the depth of intellectual capital that gives Toltec Capital an operational advantage. Value creation is a function of how well the human capital manages the financial capital and the intellectual capital. Our enduring success as a private equity firm has resulted from an investment focus that incorporates diversification with concentration.

Intellectual Capital

Bernardo Mendía-Alcaraz, as the Managing Partner of Toltec Capital, leads a diverse team of private equity professionals and analysts in both the San Francisco and Mexico City offices. With academic credentials in public policy from the Goldman School of Public Policy at the University of California at Berkeley and over two decades of experience in asset management, Bernardo brings an innovative analytical approach to investing in real estate and index fund asset classes. Because of management’s consistent “outside the box” thinking, Toltec Capital has been able to prosper during the covid-19 recession. Depth of intellectual capital is what allows unorthodox ideas to thrive during a financial crisis.