Southern Cross believes that investing in Latin America has to primarily be based on an operating philosophy and not a financial engineering philosophy. Investing for Southern Cross is based on five basic principles:
Focus on Genuine Value Creation
Southern Cross focuses on increasing the value of the companies in which it invests by optimising the company’s strategic posture and their operating performance. This is done through the direct and personal involvement of Southern Cross’s general partners with the management of each portfolio company. Southern Cross develops operating and strategic plans during the acquisition process and closely monitors their applications and results. Consequently, projects are evaluated first and foremost on the basis of the clarity of the opportunity, probability of materialization and size of the value creation potential they represent.
Emphasis on Management Excellence
The quality of management at each portfolio company is a key component in the value creation process. The ability to identify, recruit, train and/or retain management teams drawn from the vast network of contacts available to the partners of Southern Cross is a significant competitive advantage in the private equity field.
Only Control Investments
In order to create value and implement its operating vision in portfolio companies, Southern Cross only invests in companies in which it has unchallenged control of the management, with general partners sitting on the board of directors of acquired companies and appointing independent strategic directors as additional board members.
Regional Approach to Investments
Southern Cross has the capability to originate opportunities, make investments and operate companies on a regional, multi-country basis. This regional capability is essential both to assist companies that operate in a single country to become multi-national corporations, in their quest for growth and opportunity, and to optimise the performance of companies which are already multi-nationals when they are acquired.
A regional capability and focus is also essential in order to provide the investment flexibility necessary to adapt the investment strategy to the priorities dictated by the changing macroeconomic circumstances prevailing in the different countries within the region.
These capabilities are available as a result of the exceptional regional expertise of the general partners and the network of contacts they have built during their extended careers in the region. Southern Cross is based in Latin America and works exclusively in Latin America. We believe that Southern Cross is the only Latin American fund with regional, multi-national capabilities, which is operated by Latin Americans who live in Latin America.
Prudent Use of Leverage
Given the volatility of the macroeconomic variables which result in highly volatile operating cash flows, unpredictability of refinancing sources and the uncertainties about timing of exits, Southern Cross is, in general, reluctant to burden the operating companies with heavy debt loads.
tweet(Stanwich Advisors) September 23, 2010 – The Southern Cross Group recently announced the final closing of Southern Cross Latin America Private Equity Fund IV, L.P. The fund closed with capital commitments of $1.68 billion, which exceeded an original target of $1.25 billion, due to strong support from existing investors and significant demand from new investors.
Limited Partner commitments were secured from a diversified group of institutional investors from Latin America, North America, Europe, Asia, and the Middle East. Among these institutions are leading endowments, foundations, public and private pension funds, financial institutions, sovereign wealth funds, and fund-of-funds.