Gramercy Closes $75M Private Credit Deal in Latin America

Gramercy Funds Management, a Greenwich, Connecticut-based alternative credit manager specializing in emerging markets, has closed a $75 million private credit transaction in Latin America, the firm announced this week. The structured deal represents one of the largest private credit commitments by a U.S.-based manager in the region this year and signals growing institutional appetite for higher-yielding debt opportunities in developing economies.

The transaction, which closed in early March 2026, provides growth capital and infrastructure financing to a diversified platform operating across multiple Latin American countries. While Gramercy declined to disclose specific borrower details citing confidentiality provisions, sources familiar with the matter indicate the credit facility supports both organic expansion initiatives and potential bolt-on acquisitions in the logistics and energy sectors.

Founded in 1998, Gramercy manages approximately $4.8 billion in assets across sovereign debt, corporate credit, and special situations strategies focused exclusively on emerging markets. The firm has established itself as a specialist in complex, structured transactions in regions where traditional bank financing remains constrained and capital markets access is limited for mid-market companies.

This latest transaction comes as private credit managers increasingly look beyond developed markets for yield enhancement, with Latin America emerging as a particularly active region for direct lending activity. According to Preqin, private debt allocations to Latin American borrowers reached $8.2 billion in 2025, up 34% from the prior year, as institutional investors seek diversification and higher returns in an environment of compressed spreads in North American and European markets.

The $75 million facility reportedly features a multi-tranche structure with both senior and subordinated components, providing flexibility for the borrower while offering Gramercy downside protection through structural seniority and covenant packages tailored to emerging market volatility. Interest rates on the senior portion are understood to be in the high single digits, with the subordinated tranche commanding returns in the mid-teens, reflecting the illiquidity premium and country risk inherent in Latin American private credit.

Sources indicate the transaction includes cross-border elements, with assets and operations spanning at least three Latin American jurisdictions. This multi-country structure, while adding complexity, allows the borrower to optimize its capital structure across different regulatory environments while providing Gramercy with geographic diversification within the regional portfolio.

The deal was structured with currency hedging mechanisms to mitigate foreign exchange risk, a critical consideration given the historical volatility of Latin American currencies against the U.S. dollar. However, a portion of the facility reportedly remains unhedged, allowing Gramercy to participate in potential currency appreciation in the region's stronger economies.

Robert Koenigsberger, Gramercy's Chief Investment Officer and a founding partner of the firm, noted in the announcement that the transaction exemplifies the firm's strategy of providing tailored financing solutions to well-positioned companies in markets where capital availability remains constrained despite improving macroeconomic fundamentals. "This transaction demonstrates our ability to structure complex, cross-border credit facilities that address the specific needs of growth companies in Latin America," Koenigsberger stated.

The Gramercy transaction is part of a broader trend of increased private credit activity in Latin America, as the region's mid-market companies face a persistent financing gap between what traditional banks will provide and what public capital markets can efficiently access. Bank lending to mid-market companies in major Latin American economies remains approximately 40% below pre-2015 levels, according to data from the Inter-American Development Bank, creating significant opportunities for alternative lenders.

Several factors are driving the growth of private credit in the region. First, regulatory reforms implemented across major Latin American economies over the past five years have strengthened creditor rights and improved bankruptcy processes, making direct lending more attractive from a risk-adjusted return perspective. Second, a new generation of professionally managed, institutionally backed companies has emerged across sectors from technology to logistics, creating a deeper pool of creditworthy borrowers.

Third, the region's infrastructure deficit—estimated at approximately $150 billion annually by the World Bank—creates persistent demand for long-term project financing that traditional bank balance sheets cannot fully satisfy. Private credit funds with patient capital and tolerance for complexity are increasingly filling this void.

The data shows both the rapid growth trajectory and the increasing scale of individual transactions, as managers become more comfortable deploying larger check sizes in the region. The first quarter of 2026 is on pace to represent the strongest quarter on record for Latin American private credit, with several transactions above $100 million reportedly in advanced stages.

Improved sovereign credit profiles across major Latin American economies have created a more favorable environment for private credit investing. Brazil, Mexico, and Chile have all seen credit rating upgrades or positive outlook revisions from major ratings agencies over the past 18 months, reflecting strengthened fiscal positions, declining inflation, and more predictable monetary policy frameworks. These sovereign improvements cascade down to the private sector by reducing country risk premiums and improving the overall investment climate.

Gramercy's successful execution of this transaction draws on nearly three decades of specialized emerging markets experience. The firm, which was founded by a team of former Brady bond traders, has evolved from its origins in sovereign debt trading to become a full-spectrum emerging markets credit manager with capabilities spanning public and private debt, special situations, and direct lending.

The firm's private credit platform, launched in 2018, has closed approximately $850 million in direct lending transactions across Latin America, Africa, and emerging Asia. The platform focuses on deals between $25 million and $150 million—a size range that Gramercy believes represents a sweet spot where competition from both local banks and larger global private credit managers remains limited.

Unlike many emerging markets investors who manage capital from a single hub, Gramercy maintains offices in Mexico City, Buenos Aires, and São Paulo, in addition to its Greenwich headquarters. This regional presence provides the firm with proprietary deal flow and the operational infrastructure necessary to conduct thorough due diligence, structure complex transactions, and actively monitor portfolio companies—capabilities that are particularly valuable in markets with less developed information ecosystems.

The firm's investment team includes professionals with operating experience in Latin American companies, providing practical insights into the region's business dynamics that complement traditional financial analysis. This operational orientation has proven valuable in structuring covenants and monitoring protocols that are appropriate for companies operating in faster-growth, higher-volatility environments.

Gramercy typically structures its private credit transactions with equity co-investment rights, allowing the firm to participate in borrower appreciation beyond debt returns. While the firm declined to comment on whether such features are included in this specific transaction, sources indicate that equity upside participation has become a standard feature of Gramercy's larger private credit deals in Latin America.

The transaction comes at a time of growing institutional investor interest in emerging markets private credit as a portfolio diversifier. With U.S. and European private credit markets experiencing significant capital inflows and corresponding spread compression, institutional allocators are increasingly looking to less-crowded markets for return enhancement.

Gramercy has raised approximately $1.2 billion across its private credit strategies since 2020, with recent fundraising accelerating as the firm's track record has matured. Limited partners in the firm's funds include U.S. public pension systems, European insurance companies, and family offices seeking emerging markets exposure through a private credit lens rather than through traditional equity or sovereign debt allocations.

While specific sector details of the Gramercy transaction remain confidential, sources familiar with the firm's strategy indicate that infrastructure-related sectors—including logistics, energy transition, and digital infrastructure—represent priority areas for the firm's Latin American private credit deployment. These sectors benefit from long-term structural tailwinds including nearshoring, renewable energy adoption, and e-commerce growth, while often facing capital constraints due to their asset-intensive nature.

Latin America's logistics sector has been a particular beneficiary of nearshoring trends, as manufacturers and distributors relocate supply chains closer to U.S. end markets. Mexico has captured the largest share of this investment, but Colombia, Brazil, and Central American countries have also seen increased activity. These logistics companies frequently require growth capital to expand warehouse networks, acquire transportation assets, and implement technology systems—use cases well-suited to private credit financing.

The renewable energy sector represents another area of significant private credit activity in Latin America. The region possesses some of the world's best solar and wind resources, yet project development has been constrained by limited local capital markets and risk-averse international banks. Private credit funds have increasingly stepped in to provide construction financing, bridge loans, and permanent debt for renewable projects that are too small or complex for traditional project finance lenders.

Digital infrastructure—including data centers, fiber networks, and telecommunications towers—has also attracted private credit capital as Latin American countries accelerate their digital transformation. These assets offer predictable cash flows, essential-service characteristics, and growth potential as internet penetration continues expanding across the region, making them attractive from a credit underwriting perspective.

The multi-jurisdictional nature of Gramercy's transaction highlights a key competitive advantage for specialized emerging markets managers: the ability to structure and execute complex cross-border financings. Latin American companies frequently operate across multiple countries, yet coordinating security packages, managing currency considerations, and navigating diverse regulatory environments requires specialized expertise that many generalist private credit managers lack.

These structural complexities serve as a barrier to entry that protects returns for managers with the necessary capabilities. Transactions that might take 60-90 days to execute in developed markets can require 6-9 months in Latin America when multiple jurisdictions are involved, requiring patient capital and deep operational resources that favor established regional specialists over opportunistic entrants.

Private credit investing in emerging markets requires fundamentally different risk management approaches than developed market lending. While credit analysis remains paramount, successful emerging markets managers must also navigate sovereign risk, currency volatility, political uncertainty, and less developed legal systems for creditor protection.

Gramercy's approach emphasizes structural protections over covenant reliance, recognizing that enforcement mechanisms in many Latin American jurisdictions remain less predictable than in developed markets. This includes super-senior security positions, offshore account controls, and guaranteed payment structures that provide downside protection independent of local judicial processes.

The firm also maintains a rigorous country exposure framework, limiting concentration to any single jurisdiction regardless of deal-specific attractiveness. This diversification requirement forces the firm to build multi-country portfolios, reducing the impact of country-specific shocks while maintaining overall portfolio yield targets.

Currency management represents another critical risk dimension. While transactions are typically denominated in U.S. dollars to provide pricing clarity and protect lenders from devaluation risk, operational revenues are usually generated in local currency. This natural mismatch requires careful analysis of the borrower's ability to access dollars through either exports or local currency exchange, with hedging mechanisms implemented when necessary to bridge timing gaps.

Gramercy faces competition from both regional specialists and global managers expanding into Latin American private credit. Firms such as Patria Investments, BTG Pactual, and Compass Group have built significant Latin American private credit platforms, leveraging local market knowledge and relationships to source deals. These regional players typically focus on their home markets—Brazil for Patria and BTG, Colombia for Compass—giving them deep networks but potentially limiting geographic diversification.

Global private credit giants including Ares Management, Apollo Global Management, and Oaktree Capital Management have also announced Latin American private credit initiatives, attracted by the higher yields and reduced competition compared to saturated North American markets. However, these firms have generally focused on larger transactions above $100 million, leaving the $25-75 million range where Gramercy operates as a less-crowded market segment.

Development finance institutions including the International Finance Corporation and the U.S. Development Finance Corporation also provide private credit in Latin America, typically at below-market rates to support development objectives. While these institutions can offer advantageous pricing, their processes tend to be slower and more bureaucratic, and they often impose restrictions around job creation, environmental standards, or other impact metrics that commercial borrowers may find constraining.

This competitive landscape creates a tiered market structure where different manager types occupy distinct niches. Gramercy's positioning as a specialized emerging markets manager with multi-country capabilities and mid-market focus appears designed to capture opportunities that are too complex for regional managers, too small for global giants, and too commercial for development institutions.

The outlook for Latin American private credit appears constructive, supported by multiple factors including persistent bank deleveraging, improving macroeconomic fundamentals, and structural growth drivers including nearshoring and digital transformation. However, the asset class faces ongoing challenges including political volatility in several key markets, currency instability, and the potential for global risk-off episodes to reduce investor appetite for emerging markets exposure.

Mexico represents the largest opportunity set, benefiting from its proximity to the U.S., deep manufacturing base, and ongoing nearshoring momentum. However, the country's 2024 elections and subsequent constitutional reforms have introduced policy uncertainty that has made some investors more cautious. Brazil offers the region's largest economy and deepest capital markets, but political polarization and fiscal challenges continue to create volatility.

Colombia and Chile have traditionally been viewed as the region's most stable and business-friendly markets, though both have experienced shifts toward more left-leaning governments that have created uncertainty around regulatory frameworks and tax policies. Argentina, despite possessing significant resources and human capital, remains challenged by chronic inflation and policy instability that limit private credit opportunities to specific sectors with dollar revenues.

Looking forward, market participants expect Latin American private credit to continue growing as a distinct asset class, potentially reaching $15-20 billion in annual deployment by 2028. This growth will likely be driven by increasing comfort among institutional investors with the risk-return profile, expanding track records among specialized managers, and continued structural improvement in creditor rights and bankruptcy processes across the region.

The Gramercy transaction, while representing a single data point, exemplifies the maturation of Latin American private credit as specialized managers deploy increasing check sizes into more sophisticated structures. As the market continues developing, transactions of this scale and complexity are likely to become more common, attracting additional capital and creating a more robust financing ecosystem for the region's growth companies.

For Latin American companies seeking growth capital, the expanding private credit market offers a viable alternative to traditional bank financing and dilutive equity raises. Private credit can provide larger commitments, longer tenors, and more flexible terms than banks, while allowing existing owners to retain control—a particularly attractive combination for family-owned businesses that dominate the region's mid-market.

However, borrowers must be prepared for more intensive due diligence, stronger covenant packages, and typically higher all-in costs than traditional bank debt. The trade-off—speed, certainty, and flexibility—makes economic sense for companies with clear growth opportunities and strong cash flow generation, but may be prohibitively expensive for more marginal businesses.

For institutional investors, Latin American private credit offers an opportunity to access higher-yielding debt investments with low correlation to developed market credit and equity portfolios. Gross returns in the 10-16% range provide meaningful spread pickup over U.S. and European private credit, which typically targets 8-12% returns in the current environment.

That yield premium compensates investors for additional risks including country risk, currency risk, and illiquidity. However, for investors with patient capital horizons and the ability to access high-quality managers with regional expertise, the risk-adjusted returns may be attractive relative to more crowded developed market alternatives. As Gramercy and other specialized managers continue demonstrating their ability to execute transactions and generate returns through full market cycles, institutional appetite for the strategy is likely to continue growing.