Enersis SA (ENI) produces electricity relatively cheaply and presents ample room for growth in the growing markets of Latin America while enjoying stability with its headquarters located in Chile, of of the most stable markets in the region, says Jean-Baptiste Nadal, Managing Director and Lead Portfolio Manager-Global and International at Metropolitan West Capital Management, LLC.
“Because it is operating in emerging markets — including Colombia, Peru and Brazil — that present still low levels of per capita electricity consumption compared to the U.S., Enersis has strong, long-term growth prospects, which are unusual for a utility company,” Nadal said.
Nadal says ENI benefits from low-cost hydroelectric generation assets when rainfalls are abundant, and Chile’s government currently provides a stable regulatory environment that has improved significantly over the last decade, and it has a government that is relatively probusiness.
“Its Chile location was not the first thing on our mind when we decided to invest in Enersis, but rather the positioning of its assets across the entire South America, its low-cost status for generation and distribution and the room in various markets for the company to build additional capacity with good returns,” Nadal said.
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