As the Mexican business environment evolves and modernizes its form of financing, nearshoring remains a constant structural phenomenon in Mexico, nearshoring remains an ongoing structural phenomenon in Mexico, impacting multiple industries beyond manufacturing.with an impact on multiple industries beyond manufacturing.

Nearshoring is not a new concept in Mexico, and it is a structural phenomenon that brings a positive long-term trend in all industries. Foreign direct investment in Mexico (FDI) 2023, plus investment announcements for 2024, indicate a positive outlook for the future, indicate a positive outlook for the future. It is also important to track new and reinvested FDI, and its impact on nearshoring, since such investment has a multiplier effect on other economic sectors, generating multiple investment opportunities. However, the business environment is dynamic and often affected by political and regulatory changes. It is therefore crucial to monitor these changes closely, as they can have significant implications on the business climate and investment decisions.

The origin of nearshoring

It is initiated by the "trade war" between the United States and China that began in 2016, with the creation of the U.S. policy "Make America Great Again", incentivizing the exit of its companies from Asian territory to promote the return home via tax incentives. This, coupled with the disruption of supply chains due to the pandemic, the closure of the Suez Canal and Russia's invasion of Ukraine, led many companies to relocate their production operations to Asia. many companies to relocate their production and/or trade operations to countries that the United States considers allies or trading partners, where these companies can take advantage of active trade agreements with the United States, known as "friendshoring".

The relocation of industrial activities in Mexico through nearshoring is a great opportunity for private or alternative debt funds, as it has opened up new investment opportunities that private equity funds can take advantage of to channel resources into projects that make their development possible. new investment opportunities that private equity funds can take advantage of to channel resources into projects that make their development possible.

Over the last few years, Mexico has become an attractive market for international investment, where nearshoring has attracted investments of between US$150 billion and US$180 billion in the last five years, representing almost 12% of Mexico's GDP, which can have an impact of up to two or three percentage points on the country's economic development.This represents almost 12% of Mexico's GDP, which can have an impact of up to two or three percentage points on the country's economic development.

According to figures from AMEXCAP (Mexican Private Equity Association), the private equity funds affiliated to this association have grown, on an annual average, around 10% in the last decade, around 10% in the last decade, and during 2023, fundraising reached approximately US$1.6 billion among the various capital strategies, which have been the investment vehicles responsible for raising these resources for subsequent investment in companies and projects.

Private equity opportunities 

Near-shoring represents an opportunity for several economic activities, but above all for The company's financing activities include financing for real estate developments for the construction of industrial warehouses, warehouses and housing. There is also a good opportunity in the areas of infrastructure and energy, as well as the entire supply chain through direct financing or factoring and/or confirming. 

Cristián Rodríguez
Manager Private Debt Fynsa AGF