Stock Ownership
Equity investments are transactions for the purchase of common stock, preferred stock, or equity shares, as well as subordinate, convertible debt securities, or other similar instruments, in companies, funds, or public, private or mixed financial institutions, and special purpose financial instruments.
These capital investments are made in strategic areas in order to support the development and growth of enterprises in shareholder countries and their holdings in the securities markets.
They likewise allow investors to have the resources and the support of a multilateral financial institution. This in turn serves as a catalyst in attracting the resources required by the company, fund, or financial institution.
CAF's equity investments are made in various forms, as follows:
- Through investment funds aimed at the acquisition, possession, management, and sale of fixed or variable income securities of companies or infrastructure projects represented in shares or participation certificates issued by those companies.
- Directly through corporate capital to support the production of goods or the delivery of service.
- Through quasi-capital investments, such as subordinate loans, preferred shares, and loans with an option to be converted into shares.
The following are some of the basic criteria considered by CAF when deciding equity participation:
- External resource mobilization achieved as a result of investment.
- Impact on regional development.
- Strategic nature of the investment.
- Output mechanisms.
- Profitability.