Advent International has closed its fifth Latin American private equity fund with $1.65 billion in capital commitments. A typical investment would be between $50 million and $200 million of equity into companies with enterprise values of between $50 million and $750 million.
Advent International, the global private equity firm, today announced the final close of its Latin American Private Equity Fund V (“LAPEF V” or the “Fund”) at $1.65 billion. LAPEF V, which was oversubscribed, is the largest private equity fund ever raised for Latin America. It is more than 25% larger than Advent’s previous fund dedicated to the region.
With the new fund closing, Advent builds on its position as the leading private equity firm in Latin America, having raised $5.1 billion(1) from international investors since 1996. The firm has the region’s largest, most experienced private equity team, comprising 33 investment professionals and 46 employees overall, working out of three long-established offices in Sao Paulo, Mexico City and Buenos Aires.
Continuing the proven strategy of its predecessor funds, LAPEF V will focus on control buyouts and expansion financings of companies across the region, investing mainly in Brazil, Mexico and Argentina. The Fund will target high-growth sectors in which Advent has deep expertise, including financial services, airport services, business services, retail/consumer and education. The typical equity investment will be $50 million to $200 million in companies with enterprise values between $50 million and $750 million.
In line with Advent’s global approach, the LAPEF team will seek to drive revenue and profit growth in portfolio companies through operational improvements, strategic repositioning and market expansion, both domestically and internationally.
“We are very pleased with the strong support we received from both existing and new investors, particularly given the challenging fundraising environment,” said Advent Managing Partner and Co-Head of Latin America Ernest Bachrach. “We believe the high level of demand reflects our clear leadership position in Latin America, with our large, experienced team, successful track record established over 14 years and differentiated strategy for building value in companies.”
A total of 51 investors participated in LAPEF V, including public pension funds, endowments and foundations, funds of funds, sovereign wealth funds, other financial institutions, corporate pension funds and family offices. The majority of the capital came from limited partners in LAPEF IV, with Advent admitting a number of new investors into the Fund as well. Geographically, 56% of the capital was raised from North American investors, 25% from European investors and 19% from institutions in the Middle East, Asia, Latin America and Africa.
“We believe Latin America offers compelling investment opportunities for firms like ours who understand the region well and have a long track record of creating value here,” said Advent Managing Partner and Co-Head of Latin America Juan Carlos Torres. “We are also in a strong competitive position, as the availability of private equity capital in Latin America continues to be limited relative to similarly sized economies in other emerging markets worldwide.”
Advent’s Experience and Approach in Latin America
Advent International is one of the most experienced and successful private equity investors in Latin America. Since entering the region in 1996, the firm has invested in 40 companies spread across seven countries. Some of the notable investments include Dufry, a global company with operations in Latin America; CETIP, CSU, Kroton, Microsiga and Parana Banco in Brazil; DolEx Dollar Express, Gayosso, Hildebrando, Inmobiliaria Fumisa and Milano in Mexico; International Meal Company (Viena, Frango Assado and La Mansion), operating in Brazil, Mexico and the Caribbean; OCA in Argentina; Nuevo Banco Comercial in Uruguay; and Aerodom in the Dominican Republic.
In Latin America, as in other regions, Advent takes an active ownership approach to investments, supporting the management of its portfolio companies in areas such as corporate governance, strategy, operations and financing. Key to this approach is Advent’s resource-intensive platform. The LAPEF team of 33 investment professionals is complemented by a network of 18 regional Operating Partners, senior executives who work with Advent and management to improve and grow the businesses in which Advent invests. This regional team can further draw on the expertise and networks of more than 120 other Advent deal personnel and 50 other Operating Partners globally to support the growth of its portfolio companies.
Building Value in Companies
By applying these resources and expertise, Advent has helped its portfolio companies in Latin America increase earnings significantly during its ownership. To date, 19 of the companies have been acquired by strategic, financial or other buyers and six have completed IPOs on local or international stock exchanges. Including realized deals valued at the time of exit, the combined enterprise value of Advent’s 40 Latin American investments has increased to more than $10 billion, and today these businesses employ more than 60,000 people. Ninety-eight percent of Advent’s realized gains in the LAPEF portfolios have come from EBITDA growth. In recognition of its regional leadership, Advent has been named Best Private Equity Firm in Latin America for the past five years in a reader poll organized by Private Equity International magazine.
LAPEF V builds on a series of Latin American private equity funds managed by Advent. These include the prior vintage, LAPEF IV, a $1.3 billion fund raised in 2007, and three other vintages dating back to the first fund in 1996. Advent also manages three other regional private equity programs: Global Private Equity (GPE), focusing on sector-specific buyouts in Europe and North America; Advent Central & Eastern Europe (ACEE), targeting buyouts and growth opportunities in Central and Eastern Europe; and Japan Private Equity Fund (JPEF), targeting investments in Japan.
About Advent International
Founded in 1984, Advent International is one of the world’s leading global buyout firms, with offices in 16 countries on four continents. A driving force in international private equity for 25 years, Advent has built an unparalleled global platform of over 150 investment professionals across Western and Central Europe, North America, Latin America and Asia. The firm focuses on international buyouts, strategic repositioning opportunities and growth buyouts in five core sectors, working actively with management teams to drive revenue growth and earnings improvements in portfolio companies. Since inception, Advent has raised $26 billion in private equity capital and, through its buyout programs, has completed over 250 transactions valued at approximately $50 billion in 35 countries. For more information, visit www.adventinternational.com.