The Latin American Private Equity & Venture Capital Association last week revealed first half 2014 fundraising numbers that indicate a resurgence in the region. PeHUB took some time and chatted with Cate Ambrose, LAVCA’s President and Executive Director about the fundraising outlook in the region this year.
What are some trends you’re seeing this year in the region?
We’re starting to see a more diversified set of products, like credit funds. Managers looking to raise credit structures, restructurings, sector focused funds. This is a fairly recent development, a few years ago it was unusual to see sector-focused funds in Latin America for example.
Private equity housing/real estate has also been well received. Tech continues to be a hot sector, as well as consumer/retail.
Are you sensing investor concern over the amount of capital flowing into the region?
If you have the right strategy, the right track record, you will be successful. At the end of the day, investors are saying we want to take a cautious approach with Latin America, or Brazil, but that doesn’t reflect where the money is going.
LAVCA indicates fundraising this year is being driven by big funds. How does the middle market look?
This year we’ll see larger funds closing and less activity in the middle market. The last two years we saw more middle market activity. It is interesting to note that many of our member firms reported an increase in assets under management from the previous year.
Any changes around the nature of investors plowing money into the region?
Sovereign wealth funds are expanding their activity, GIC and Temasek are very active in Latin America. So are Canadian pension funds.
How could Brazil’s upcoming presidential election change the environment?
Global investors are indicating that they would prefer to see a new president rather than the re-election of Dilma Rousseff. Right now there is excitement within Brazil and internationally around Marina Silva as a potential for change. Brazil has had the same party in place for 12 years now, so it’s not surprising that there is a strong appetite for change.
Photo courtesy of LAVCA.