March 25, 2015 / 9:22 PM / 5 years ago

Exclusive: BlackRock to invest in Mexico's infrastructure - sources

(Reuters) - BlackRock Inc (BLK.N), the world’s largest asset manager, is looking to invest in infrastructure projects in Mexico, according to sources familiar with the situation.

A construction worker talks on his mobile phone in Mexico City September 19, 2012. REUTERS/Tomas Bravo

As Mexico has opened up to foreign capital in recent years, BlackRock’s infrastructure investment group sees an opportunity and is setting up a team of specialists to work out of its Mexico City office, said the sources, who wished to remain anonymous because they are not permitted to speak to the media on the record.

A BlackRock spokesman declined to comment.

BlackRock Chief Executive Larry Fink has declared his affinity for Mexico before. In a blog post on BlackRock’s blog last June, he wrote that Mexico City was one of his favorite cities and encouraged millennials to live there.

“Mexico is finally beginning to unlock its true potential as an economic powerhouse,” he wrote. “Over the next few decades, capital is going to flow more effectively in Mexico, the workforce will become better trained, and it will be easier and easier to do business.”

The Mexican government last year said it planned to raise 7.7 trillion Mexican pesos ($515.46 billion) in infrastructure investment through 2018, but in late January cut its 2015 budget by nearly 3 percent and shelved a $3.75 billion high-speed train tender as part of its austerity measures.

Earlier this month, Mexico’s Finance Minister Luis Videgaray urged the private sector to take a bigger role in billions of dollars worth of planned public works and the opening of the country’s energy sector, weeks after scaling back its own spending plans due to slumping oil prices.

BlackRock has an office with about 30 people in Mexico City as part of its iShares exchange-traded fund business, and is looking to hire investment specialists in Mexico’s infrastructure, the sources said.

The challenge for BlackRock is that many institutional investors, including private equity firm, KKR, are also looking to invest in infrastructure projects in Mexico.

A KKR spokeswoman declined to comment on Wednesday.

The sources would not comment on any specific infrastructure projects that BlackRock’s infrastructure investment group is considering. Most recently it has been focused on renewable energy projects in the United States.

In February, the New York-based firm announced that a fund managed by its infrastructure investment group had purchased a 50 percent interest in a Deaf Smith County, Texas-based wind farm from EDF Renewable Energy, a power producer that has developed projects in Canada, Mexico and the United States.

BlackRock’s infrastructure investment group has $6 billion in invested and committed assets, $1.5 billion of which is in renewable energy, according to the firm.

Reporting by Jessica Toonkel; editing by Linda Stern and Richard Chang

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