Our sole advisory business is providing investment advisory services to private equity
funds that invest in operating companies. The private equity funds were formed by SCGM
or its affiliates and consist of closed-end partnerships that generally make value-oriented,
control investments in Latin American companies which SCGM believes have significant
potential for improved performance and growth. The private equity funds are structured
as limited partnership vehicles, in which investors will be limited partners and an SCGM-
affiliate serves as the general partner.
SCGM was formed in 2015 as an adviser, following the success of its affiliate Southern Cross
Capital Management (“SCCM”), which was formed in 1998 (SCGM and SCCM, together,
“Southern Cross”), which was formed in 2006, with the same purpose. SCGM is controlled
by the members of an Executive Committee of SCGM S.A., the general partner of SCGM,
consisting of Norberto Morita, Ricardo Rodriguez, Raúl Sotomayor, Sebastián Villa and
Diego Acevedo (the “Executive Committee”). SCGM is owned, directly or indirectly through
non-publicly held intermediate entities by the Executive Committee members, as well as
certain other partners (each, a “Principal” and collectively, the “Principals”).
The general partner of Southern Cross Latin America Private Equity Fund V, L.P., an Ontario
limited partnership (“Fund V”), is Southern Cross Capital Partners V, L.P., an Ontario limited
partnership (the “General Partner”), which is controlled by the Executive Committee of
SCGM S.A. Fund V raised $ 540.4 million and has a term of ten years.
Southern Cross Latin America Private Equity Fund III, L.P. (“Fund III”); and Southern Cross
Latin America Private Equity Fund IV, L.P. (“Fund IV”
1) (Fund III and Fund IV, each an
Ontario, Canada limited partnership) are now advised by SCGM effective December 20,
2019. Fund III raised $ 751 million and had a term of ten years, which was extended in
2016, 2018 and was again extended in December 2020 until April 2021. Fund IV raised $
1,681 million and has a term of ten years. The general partners of Fund III (Southern Cross
Capital Partners III, L.P., or the “General Partner of Fund III”) and Fund IV (Southern Cross
Capital Partners IV, L.P., or the “General Partner of Fund IV”) are also Ontario, Canada
limited partnerships and both of them are controlled by Messrs. Morita, Rodriguez and
Sotomayor.
1 Fund IV made a final liquidating distribution to its limited partners during January 2023, and
was dissolved on February 15th, 2023.
Southern Cross Latin America Extension Fund IV, LP., an Ontario, Canada limited
partnership (“SCLAEF”), is advised by SCGM effective November 18, 2020. SCLAEF was
incorporated as part of a secondary process to create liquidity for Fund IV limited partners
and/or obtain more time to exit Fund IV´s portfolio; where Fund IV transferred all of its
interest in its portfolio to SCLAEF, SCLAEF has a commitment of $ 217 million and a term of
five years, which may be subject to extensions in accordance with its Limited Partnership
Agreement (“LPA”).
SCGM serves as Fund III´s, Fund IV´s, Fund V’s and SCLAEF´s investment manager.
Pursuant to Delegation and Assumption Agreements, the General Partners of Fund III and
Fund IV (in accordance with their delegation authority under their respective Limited
Partnership Agreements (“LPAs”)) delegated to SCGM the authority to provide advisory
services to Fund III, Fund IV and their related parallel vehicles and alternative investment
vehicles. The Management and Advisory Agreements of Fund III and Fund IV to provide
such services were amended effective December 20, 2019 to reflect such delegation of
duties.
Fund V, as provided for in the LPA, has entered into a Management and Advisory Agreement
with SCGM pursuant to which Fund V has appointed SCGM, who has broad authority to
provide management, financial, advisory and other services to Fund V, related parallel
vehicles and alternative investment vehicles, and portfolio companies in which Fund V
invests.
Southern Cross Capital Partners Extension IV, L.P., general partner of SCLAEF, has entered
into a Management and Advisory Agreement with SCGM pursuant to which, it has the broad
authority to provide management, financial, advisory and other services to SCLAEF and its
related parallel vehicles and alternative investment vehicles.
Ancora Investments, L.P. (“Ancora”), Polinvest, L.P. (“Polinvest”), and Cyprus SCG
Investments, L.P. (“Cyprus SCG Inv.”) each an Ontario, Canada limited partnership
(together, “the Cyprus entities”) are advised by SCGM effective June 30, 2021. The Cyprus
entities were incorporated as part of a secondary process to create liquidity for Fund III
limited partners; where limited partners who elected to sell their interest in Fund III did so
to Ancora, Polinvest and Cyprus SCG Inv. The Cyprus entities have combined commitments
of $ 18.9 million and a term
tied to that of Fund III, or five years, whichever is longer, and
subject to extensions in accordance with their respective Limited Partnership Agreement
(each, an “LPA”).
Cyprus SCG Co-Investments, L.P., an Ontario, Canada limited partnership (“Cyprus SCG Co-
Inv.”) was created as part of the secondary process where certain Fund III investors and the
Cyprus entities elected to co-invest with Fund III in certain Fund III´s portfolio companies.
Cyprus SCG Co-Inv is advised by SCGM as of August 30, 2021. Cyprus SCG Co-Inv. has a
commitment of $ 15.2 million and a term tied to that of Fund III, or five years, whichever is
longer, and subject to extensions in accordance with their respective LPA.
SCG Cyprus Capital Partners, L.P., general partner of Ancora, Polinvest, Cyprus SCG Inv. and
Cyprus SCG Co-Inv. has entered into a Management and Advisory Agreement with SCGM
pursuant to which, it has delegated broad authority to SCGM to provide management,
financial, advisory and other services to Ancora, Polinvest, Cyprus SCG Inv. and Cyprus SCG
Co-Inv. and their related parallel vehicles and alternative investment vehicles.
In addition to SCGM, Messrs. Morita, Rodriguez and Sotomayor have been affiliated with a
related entity, SCCM, since 1998. SCCM formed two other funds preceding Fund III and Fund
IV: Southern Cross Latin America Private Equity Fund, LP (“Fund I”) in 1998 and Southern
Cross Latin America Private Equity Fund II, L.P. (“Fund II”) in 2003.
The strategy of Fund I, Fund II, Fund III, Fund IV, Fund V, SCLAEF, Ancora, Polinvest, Cyprus
SCG Inv., and Cyprus SCG Co-Inv. (Fund III, Fund IV, Fund V, SCLAEF, Ancora, Polinvest,
Cyprus SCG Inv., and Cyprus SCG Co-Inv., collectively “the Funds”) has remained relatively
the same since 1998: to make private equity buyout investments in Latin America . The
Funds were established based on Norberto Morita’s and Ricardo Rodriguez’s (together, the
“Founders”) shared history of value creation and fundamental belief that private equity
investing in Latin America cannot succeed based solely on a financial engineering model. In
Southern Cross’ view, the ability to consistently generate attractive investment returns
requires (i) extensive local operating and transactional experience; (ii) the ability to create
“genuine” long-term, sustainable value through improved operating performance and
strategic direction; (iii) the ability to identify, recruit, and work closely with talented local
managers; and (iv) a conservative, disciplined approach to pricing and leverage. In order to
achieve this, Southern Cross makes investments in concentrated portfolios that enable it to
devote substantial time to each of its portfolio companies. Southern Cross also mostly
invests in control investments as a way to accomplish the changes that it believes are
required and as a means to reasonably manage the timing to exit.
Each of the Funds is governed by a Limited Partnership Agreement. Pursuant to each LPA,
the management, control and operation of the Funds and the formulation of investment
policy is vested exclusively in each Fund’s General Partner. Therefore, each Fund’s General
Partner has full authority to undertake the business purpose of the relevant Fund, which
according to their LPAs, consist of (i) making directly or indirectly through affiliates or other
entities equity and equity-related investments in Latin America (or to a limited extent
outside of Latin America); and (ii) managing, owning, supervising, selling and disposing of
the investments. The limited partners do not participate in the management or control of
the Funds. The LPAs contain certain investment restrictions that are determined at the time
the Funds are formed.
In addition, under certain circumstances, including, without limitation, (i) where the Funds
have decided to excuse certain limited partners from making capital contributions in
respect of specific investments and have instead required them to contribute their
otherwise due amounts in respect of specific investments outside of the Fund as co-
investors, or (ii) to facilitate investments while simultaneously addressing certain legal, tax
or regulatory considerations, a Fund’s General Partner may establish certain alternative
investment vehicles ("Alternative Investment Vehicles") or parallel funds ("Parallel
Funds"). Governance of these Alternative Investment Vehicles or Parallel Funds will be
entirely bestowed on the Fund’s General Partner or on one or more affiliates of the General
Partner, and the investment decisions for the Alternative Investment Vehicles or Parallel
Funds will be identical to those for the Fund to which such Alternative Investment Vehicle
or Parallel Fund relates. SCGM or an affiliate thereof will manage the operations of these
Alternative Investment Vehicles and Parallel Funds.
As of December 31, 2022, SCGM had $1,427 million in discretionary assets under
management. SCGM will not manage any client assets on a non-discretionary basis.