Colombia Update: MODIFICATION OF THE INVESTMENT POLICY OF THE PENSION FUNDS ADMINISTRATORS

Through Law 2112 of July 29, 2021, the Colombian Congress, to encourage entrepreneurship through the strengthening of private equity funds, decided to modify paragraph 2 of Article 100 of Law 100 of 1993, for purposes of including the following amendments:

• At least 3% of the resources managed by pension fund management companies, must be invested in private equity funds (FCP) that have, within their investment policy, to participate in Colombian companies or productive projects in Colombia.
• Investment in funds that, in turn, invest in FCP, known as “Funds of Funds”, will also be considered as an investment in Colombian companies or productive projects in Colombia.
• However, the following will not be considered for the calculation of the minimum investment percentage:
  • Investments in extractive companies in the energy mining sector.
  • Investments in companies economically linked to pension funds managing companies or belonging to entrepreneurial groups, or financial conglomerates of these institutions.

Additionally, the FCP will be obliged to certify and quarterly report to the Financial Superintendency of Colombia the strict compliance with its regulations.

Likewise, it was established that the minimum investment percentage referred must be obtained within the following two years as of the entry into force of this Law (July 29^th, 2021).

By LLOREDA CAMACHO & CO, Colombia, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact colombia@transatlanticlaw.com 

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