AFORE XXI Banorte

Investment Strategy

AFORE XXI Banorte is Mexico’s largest pension fund administrator (AFORE), managing approximately $60 billion in retirement savings for over 22 million individual account holders. The fund was created through the 2012 merger of AFORE XXI, a government-backed pension administrator, and AFORE Banorte, the pension management arm of Grupo Financiero Banorte, one of Mexico’s largest financial groups.

As an AFORE, XXI Banorte operates within Mexico’s mandatory defined contribution pension system. Mexican workers are required to contribute a percentage of their salary to an individual retirement account managed by their chosen AFORE. These contributions are invested through SIEFOREs (Sociedades de Inversion Especializadas en Fondos para el Retiro), which function as target-date fund structures with investment allocations adjusted based on a worker’s age and expected retirement date.

AFORE XXI Banorte’s investment strategy spans Mexican and international equities, government and corporate bonds, structured instruments, and alternative investments. The fund’s investment decisions are governed by regulations established by CONSAR (Comision Nacional del Sistema de Ahorro para el Retiro), the regulatory body overseeing the Mexican pension system. CONSAR sets investment limits by asset class, credit quality, and geographic exposure, which define the boundaries within which AFOREs can construct their portfolios.

The fund’s investment team manages portfolio construction within these regulatory parameters, with a focus on maximizing risk-adjusted returns for members. AFORE XXI Banorte has been one of the most active Mexican AFOREs in diversifying its portfolio beyond traditional Mexican government bonds and building exposure to alternative investments and international markets.

Private Markets Approach

AFORE XXI Banorte’s private markets allocation has grown significantly since Mexican AFOREs were first authorized to invest in alternatives. The fund allocates approximately 12% of assets to alternative investments through two primary instruments: CKDs (Certificados de Capital de Desarrollo) and CERPIs (Certificados Bursatiles Fiduciarios de Proyectos de Inversion).

CKDs are structured investment vehicles listed on the Mexican stock exchange (BMV) that allow AFOREs to invest in domestic private equity, infrastructure, real estate, and energy projects. CKDs were first introduced in 2009 and have become the primary channel for Mexican pension capital to access domestic private markets.

CERPIs, introduced in 2016, expanded the investment universe by allowing AFOREs to invest in international private equity, infrastructure, and real estate funds through a listed vehicle structure. CERPIs have enabled Mexican pension funds to access global GP fund commitments for the first time, and AFORE XXI Banorte has been an active participant in the CERPI market.

In private equity, AFORE XXI Banorte has committed to both domestic CKD structures investing in Mexican companies and CERPI vehicles providing exposure to international buyout, growth equity, and venture funds. Infrastructure is a significant area of interest, with investments in Mexican energy, transportation, and telecommunications infrastructure through CKDs, as well as international infrastructure exposure through CERPIs.

Real estate investments span Mexican commercial and residential property through CKDs and international real estate exposure through CERPIs. Private credit has been a growing allocation, with investments in structured lending and financing vehicles.

The CKD and CERPI structure creates unique dynamics for fund managers seeking Mexican pension capital. Managers must work within the regulatory and listing requirements of these instruments, which adds complexity but provides access to one of Latin America’s largest pools of institutional capital.