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Vinci said to mull second-half launch for Fund III with $800 mln target

  • Vinci could target up to $800 mln for Fund III
  • Fund II nearly fully deployed
  • Execs to invest own money in deals before launching fund

Vinci Partners could come back to market in the second half with a potential $800 million target for its third fund, according to a person with knowledge of the firm.

Vinci’s prior fund, which closed on $1.4 billion in 2011, is just about fully deployed, the person said.

Vinci executives plan to invest their own money in a few deals prior to launching fundraising. Those deals will eventually be rolled into Fund III, taking away some of the fund’s blind-pool risk, the person said.

Gabriela Medina Wickert, investor-relations executive at Vinci, declined to comment.

Vinci’s second fund was generating a negative 15.6 percent internal rate of return and a 0.6x multiple as of Sept. 30, 2015, according to performance information from California Public Employees’ Retirement System.

In February, Vinci and Carlyle Group said they jointly acquired distance-learning company Uniasselvi. Education, healthcare and technology remain sectors of interest to PE investors in Brazil.

Harsh fundraising environment

Fundraising in Brazil this year could be treacherous, with the economy in shambles and the political situation unstable.

This would contrast with the bull-market fundraising environment all of Latin America enjoyed in 2014, when firms raised a record-breaking $10.39 billion. Brazil funds captured $5.56 billion, or more than half, of that total, according to data from the Latin American Private Equity and Venture Capital Association.

Last year, however, fundraising declined as macro issues scared away investors. Overall, Latin America funds pulled in $7.2 billion, the Latin America PE trade group said. That trend is expected to continue this year, especially in Brazil.

At the IFC Empea Global Private Equity conference, held May 9 through 12 in Washington, sources described a challenging situation in Brazil, which entered recession last year.

Local Brazilian pensions, which in recent years helped support domestic private equity funds, are being more cautious, said Jaime Cardoso, partner at Bozano Investimentos, who spoke on a Brazil-focused panel.

Local firms that can’t make the transition from local to international limited partners for their next funds will have problems, Cardoso said.

Action Item: For more about Vinci: contato@vincipartners.com

Photo: Brazilians favoring impeachment of President Dilma Rousseff react to the televised voting of the Lower House of Congress over her impeachment in Brasilia on April 17, 2016. Courtesy Reuters/Adriano Machado