Updated: Aug 31
Canada Pension Plan Investment Board (CPP Investments) announced that it has invested US$334 million, for a 19.3% stake, in D1, the market leader in Latin America’s expanding “hard discount” food retail space, which focuses on offering selections of private-label products at affordable prices.
“Hard discounters” differ from traditional supermarkets by prioritizing convenience and low prices over size and assortment. This business model has proven highly successful in Colombia, where D1 has opened over 2,000 stores since its founding in 2009.
The transaction marks CPP Investments first direct private equity investment in Colombia, a market that is predicted by the OECD to grow by 6.1% in 2022 more than double the global growth forecast.
“D1 provides an excellent opportunity to capitalize on the behavioral shift occurring in Latin America’s food retail space, where consumers are adopting new ways of shopping that prioritize convenience and price,” said Tania Chocolat, Head of Active Equities Latin America and São Paulo Office Head at CPP Investments.
D1 disrupted the food retail industry in Colombia, where it is leading a boom in the hard discount model. It is steadily opening more stores and introducing new products, which are known throughout Colombia for their high quality and low prices.
“Latin America is a region where several industries are undergoing rapid transformation and Colombia is among the markets we’ve identified as particularly fertile for growth,” added Chocolat. “Our investment in D1 supports our goal of identifying standout companies in the region that are well-positioned to deliver strong long-term, risk-adjusted returns for the CPP Fund.”
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the 21 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31 2022, the Fund totalled C$539 billion.