Canada’s Pension Fund Pays $334 Million For 19% Stake in D1 Colombian Discount Grocery Chain

The Canada Pension Plan Investment Board, also known as CPP Investments, today announced that it has paid $334 million USD, for a 19.3% stake, in Colombian discount convenience store chain Tiendas D1. The retailer is 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. The chain shares some similarity to the Aldi chain, popular in Europe and North America, albeit with a smaller store footprint.

“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.

Tania Sztamfater Chocolat is the Managing Director, Head of São Paulo Office, Head of Active Equities Latin America for CPP Investments (photo: CPP Investments)

The transaction marks the first direct private equity investment in Colombia for CPP Investments; a market that is predicted by the OECD to grow by 6.1% in 2022 – more than double the global growth forecast.

The transaction values the convenience stores at over $1.7 billion USD.

“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.”