Investment Strategy
AFP Modelo is a Chilean pension fund administrator managing approximately $12 billion in mandatory retirement savings. Modelo is notable for winning Chile’s competitive pension tender process multiple times by offering the lowest administrative fees, which has driven rapid membership and asset growth as all new workers entering the system were assigned to Modelo.
The investment strategy operates within Chilean regulatory constraints. Modelo allocates approximately 5% to alternatives through CKD-equivalent structures permitted under Chilean regulations. The alternatives allocation has been growing as the fund scales and builds investment capabilities.
Modelo is owned by Sura Asset Management and Principal Financial Group, providing access to institutional-quality investment resources and global manager networks. The fund invests across fixed income, domestic and international equities, and alternatives.
How to Approach
AFP Modelo’s investment team is based in Santiago. GPs should approach with strategies structured to comply with Chilean pension fund regulations. The fund’s rapid growth trajectory means its investment program is scaling, potentially creating opportunities for new GP relationships.
The connection to Sura and Principal provides the fund with established manager networks. GPs with Latin American expertise or strategies accessible through Chilean regulatory structures will find the most relevance.
Frequently Asked Questions
How much does AFP Modelo allocate to alternatives?
AFP Modelo allocates approximately 5% of its assets to alternative investments. As the AFP that won Chile's competitive pension tender process (for new workers entering the system), Modelo has experienced rapid asset growth. The alternatives allocation is growing but remains lower than some larger Chilean AFPs as the fund builds its program.
How can fund managers approach AFP Modelo?
AFP Modelo's investment team is based in Santiago. GPs should approach the international investments team directly. As a rapidly growing AFP, Modelo has been building its alternatives capabilities and may be open to new GP relationships. Fund structures must comply with Chilean pension regulations.
What makes AFP Modelo distinctive?
AFP Modelo won Chile's competitive pension tender process by offering the lowest administrative fees, which assigned all new workers entering the pension system to Modelo for a two-year period. This has driven rapid asset growth. Modelo is owned by Sura Asset Management and Principal Financial Group, providing access to institutional investment resources.
