The Chilean pension fund system has breached in 2018 the 200bn threshold. Its pension fund system –
Administradoras de Fondos de Pensiones – traditionally already very open to investment overseas, has now the
potential to increase exponentially the exposure to overseas alternative investments. A recent reform affecting the
pension system allows in fact Chilean pension funds now to directly invest as well as co-invest in foreign private
equity funds. The Chilean pension regulator – Superintendencia de Pensiones – issued in November 2017 a
regulation implementing this amendment, following a Bill in 2016 that had changed the existing legal framework.
The regulation marks an important change in respect of the previous regime, whereby Chilean pension funds were
allowed to invest in private equity exclusively via local feeder funds. The heavy regulatory burden imposed on local
feeder structures, requiring both registration with local regulatory authority as well as management by investment
managers registered locally, made access to foreign private equity investments for Chilean pension funds dificult.
Whilst the new regulation hasn’t eliminated these types of indirect investment structures, which may retain some
tax advantages, the changes made to the legal framework are welcome and will pave the way for further blossoming of the market of alternatives investments in Chile.
This article aims to describe the role that the Commission Clasificadora de Riesgo plays both in the recognition of
funds as well as in the new regime for recognition of foreign General Partners.

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