Mexican pension funds, known as Afores, are strategically increasing their investments in government debt, reaching a record $409 billion in net assets by June 2026. This growth is fueled by reforms to the mandatory savings system aimed at expanding pension access and contributions. Government data indicates that over half of the Afores' portfolios are allocated to Mexican public debt, making them the primary lenders to the government, surpassing foreign investors.
Alongside this increased allocation to government debt, Afores are also diversifying into alternative assets such as private equity, credit, real estate, and infrastructure. Recent regulatory changes now permit Afores to invest up to 30% of their portfolios in these alternatives for certain workers. Andrés Moreno, Chief Investment Officer of Afore Sura, one of the largest funds with $1.3 trillion under management, expressed confidence that these alternative assets will generate superior returns compared to public markets.
The growing influence of Mexican Afores in the global investment landscape was evident at an industry event in Mexico City, attended by major alternative investment firms like Ares Management and Apollo Asset Management. Blue Owl Capital's Michael Rees compared Mexico's mandatory savings system to Australia's, noting its rapid growth and potential. The Mexican government also views Afores as key drivers for future infrastructure projects, having already financed roads, industrial parks, energy projects, and social housing.
