For years, the conversation around corporate governance in Latin America and the Caribbean has focused primarily on companies. Yet as the private equity industry matures, a new question is becoming increasingly relevant: How robust are the governance frameworks of investment funds and capital managers themselves?

The answer matters because the growth of private capital worldwide has been accompanied by increasingly sophisticated governance standards, driven by the participation of institutional investors, the internationalization of capital flows, and growing demands for transparency, accountability, and alignment of interests. In an industry built on long-term relationships, these attributes not only strengthen trust between fund managers and investors but also become a decisive factor in competitiveness.

Governance Starts with the Fund Itself

This is the rationale behind the AMEXCAP Corporate Governance Best Practices Standard for Private Equity Funds, developed by the Mexican Private Equity Association (AMEXCAP) with the support of IDB Invest. The Standard represents an important step in the institutional evolution of Mexico’s private equity ecosystem.

Over the past two decades, Mexico has built one of the most dynamic private equity industries in the region, with local and international institutional investors playing an increasingly important role. However, this growth has also revealed differing levels of maturity in governance, transparency, and conflict-of-interest management. In this context, having a common reference framework is no longer aspirational; it strengthens the market’s competitiveness.

A Common Language for the Industry

The purpose of the Standard is not to impose a one-size-fits-all model or create unnecessary bureaucracy for investment funds. Rather, it is based on the principle of “comply or explain,” which recognizes differences in size, strategy, and maturity levels among fund managers.

Its main contribution is providing a shared reference point built around widely recognized principles: alignment of interests, governance, and transparency. In markets where participants operate with varying degrees of sophistication, a common language helps facilitate relationships between managers and investors while raising industry standards.

The Standard was developed through consultations with institutional investors, family offices, and fund managers, complemented by a benchmarking exercise of international frameworks. This approach made it possible to combine global best practices with the specific characteristics and needs of the Mexican market.

As José María Zertuche, chairman of AMEXCAP’s Board of Directors, stated:
“We developed this best practices manual for our members and for the market as a whole to reduce friction in the development of fund managers and fundraising efforts, thereby facilitating the flow of investment to the companies and sectors in which private capital participates.

Beyond specific practices, the Standard recognizes that effective governance requires clear roles and responsibilities for the various participants in the ecosystem. A proper separation of functions and a balanced relationship among fund managers, investors, and oversight bodies help preserve independence of judgment and strengthen trust among stakeholders.

An Opportunity for Mexico and a Reference for the Region

As an investor and long-term partner in Latin America and the Caribbean, IDB Invest has observed firsthand that strong governance improves decision-making, strengthens risk management, and helps protect investors’ interests. It also promotes better alignment between fund managers and capital providers, enhances oversight mechanisms, and reduces friction in due diligence processes. Together, these factors create more favorable conditions for mobilizing capital, particularly from international institutional investors.

For this reason, the value of the Standard extends beyond Mexico. It demonstrates that markets across the region can develop their own frameworks, aligned with international standards while adapted to local realities and priorities. That combination of global vision and local ownership is essential to further strengthening the ecosystem's institutionalization.

Ultimately, the most competitive markets are not necessarily the largest. They are the ones capable of offering clear rules, strong incentive alignment, and effective oversight mechanisms. These are the attributes that help build lasting relationships and attract long-term capital.

The AMEXCAP Standard represents an important step in that direction, demonstrating how collaboration among fund managers, investors, industry associations, and development institutions can create replicable frameworks for other markets across Latin America and the Caribbean.

Because capital does not seek opportunities alone; it also seeks certainty. And when that certainty is grounded in strong governance, it can translate into greater investment, stronger long-term relationships, and a greater capacity to finance businesses and projects that drive the region’s sustainable development.