Bancóldex, whose initial mandate is to finance Colombian exporters, has expanded its alternatives portfolio with the goal of investing more in venture and green infrastructure.
The state-owned commercial bank, which had roughly $2.3 billion in total assets, according to its 2024 annual report, operates mainly as a second-tier bank to local businesses.
Bancóldex began investing in private capital in 2009 with $20 million from the bank’s balance sheet. That capital, which has grown to roughly $120 million today, is invested via fund commitments, Guillermo Martinez, senior portfolio manager, tells Private Equity International.
The bank’s main objective: to mobilise capital towards Colombian companies and projects that will boost the local economy. Over time, its investment mandate has evolved to finance both large companies and small- and medium-sized enterprises through private debt and equity solutions.
Back in 2019, Bancóldex set up its fund of funds programme, Bancóldex Capital, which invests in venture, growth equity, buyouts, private credit and infrastructure. Aside from balance sheet capital, Bancóldex Capital also gathered commitments from investors including SoftBank, CAF (the Development Bank of Latin America and the Caribbean) and Colombia’s Ministry of Science.
It was around this time that SoftBank set its sights on the region with a $5 billion Latin America tech fund. Bancóldex then set up sub-funds for venture, credit, growth and other strategies to cater to the needs and portfolio construction objectives of their third-party investors.
“While we had both good and bad deals, it is a profitable programme in the end, with a gross multiple of 1.67x of realised underlying companies. And, just as important, we were mobilising around 7x our commitment to Colombian companies,” says Martinez.
“We were focused on LatAm venture capital from 2020 to 2023. We shifted allocation recently to invest more in infrastructure, green energy transition and social housing and education, as well as in impact funds focused on micro companies in the Pacific and Amazonian regions,” he adds.
“The objective isn’t just to seek a financial return, but mainly to mobilise smart capital. This is essentially what private equity is about: managers not only inject capital, but also apply good practices, know-how and their network into local companies.”
Investing in Colombia
The main challenge to Bancóldex’s investment mandate is that the domestic PE landscape provides a narrow opportunity set.
According to data from industry association ColCapital, capital raising for venture capital in Latin America experienced a significant contraction between 2023 and 2024, dropping from $2.2 billion to $547 million. Meanwhile, Colombia-based start-ups attracted $513 million of investments in 2024, compared with $2 billion in Brazil and $1.2 billion in Mexico.
As such, Bancóldex also invests in regional and international managers, including Miami-based DILA Capital and Americas-focused venture firm MatterScale Ventures, PEI data shows. It typically commits approximately $3 million in venture funds, up to $8 million in buyout and growth funds, and up to $15 million in infrastructure, says Martinez. Over the years, Bancóldex has backed funds by domestic managers, as well as those from Panama, Chile, Mexico and Brazil.
“Our mandate for any fund is to mobilise a minimum of 2x our capital commitment to investments into Colombian companies. When we sign a commitment, we also sign an agreement letter with the manager. For example, if we give you $10 million, we expect the fund to invest at least $20 million into the country,” he says.
Martinez continues: “We ask, what’s your Colombian approach? Because we want to know if the manager has a deal pipeline here and whether it has people on the ground. If not, what’s your plan to be in Colombia? Are you going to be a member of ColCapital?”
Looking ahead
Bancóldex has $12 million to invest in first-time managers over the next two years across three to four funds, says Martinez. It also has $10 million to invest in impact managers focused on Colombia in 2025-26.
“We want to make an impact in Colombia – not just in the big cities, but also in the Amazon region and along the Pacific Coast that [serves] the country’s low-income population. Our goal is to have those fund commitments already approved by the beginning of next year.”
Bancóldex is set to more than double its alternatives portfolio to at least $300 million in the next three years, according to Martinez. It expects its venture bucket to reach $100 million and infrastructure to reach $200 million.
Venture and tech investments comprise more than a third of the bank’s portfolio, followed by consumer, e-commerce and infrastructure. Green infrastructure and social infrastructure will be important sectors in the portfolio, according to Martinez, where the bank expects to invest in solar energy generation projects and other renewable sources, transportation, telecommunications, education and health in Colombia, Brazil, Mexico and Chile.
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