More PE and VC Money Flows to Brazil

Based on conversations I’ve eavesdropped on at venture and private equity events in the past few months, it certainly seems like more industry insiders are eyeing investments in Latin America, particularly Brazil.

Now there’s more hard data to back up that supposition. Fundraising for Latin American private equity and venture capital investment rose to $4.9 billion in the first half of this year, up 59% from the same period last year, according to a report released today by the Latin American Venture Capital Association (LAVCA).

Brazil accounts for the lion’s share of committed capital, with 67% of the total amount raised dedicated there. That includes two billion-dollar-plus Brazilian funds, BTG Pactual ($1.6 billion) and Vinci Partners ($1.4 billion). Additionally, two Brazilian investment firms, Pátria and Gávea closed on an additional $3.2 billion in the third quarter, meaning this year’s fund-raising totals are well on track to surpass the $8.1 billion raised in all of 2010.

Exits also surged in the first half of the year, surpassing all of 2010, with 33 PE-backed exits valued at $8.9 billion, according to LVCA. Strategic sales dominated the exit market, with Ashmore Energy International’s divestment of its Latin American portfolio accounting for over $4bln of the exit total. However, there were also some IPOs on local and international exchanges, including private equity-backed Arcos Dorados, an Argentina-based McDonald’s franchisee,which went public on the New York Stock Exchange in April.


  • Brazil will be a power hose in a few years!

  • Opportunities are endless in Brazil but the market is due for a crash sooner, rather than later. I just spent a week in the country meeting with locals and expats to discuss market trends and business opportunities. There is too much money chasing too few opportunities in a country which is inherently prone to inflation due to geography and historic economic structure (see Stratfor article One well-placed insider described to me the Brazilian parallels he sees in the run-up to the US crash: widespread advertisements for no down-payment loans with no credit checks handed out to maids and other low-income workers. It’s time to start looking at other South American investment destinations.

  • Here is a summary of PE activity in Brazil and Latam for 2010

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