EMPEA Insight: Latin America

The re-emergence of Latin American private equity that began in 2006 manifested in a fundraising surge in 2007 and 2008, during which time the region saw more PE capital raised than in the preceding five years combined (2002-2006). This solid base of capital, on top of several years of improving fiscal and macroeconomic policies and a cadre of fund managers practiced at weathering down cycles, positions Latin America’s PE industry well for tough times ahead.

Funds focused on Latin America have raised US$13 billion between 2002 and 2008 year-to-date, nearly US$8 billion of which was raised in the last two years alone. Brazil has led the resurgence, with Brazil-dedicated funds drawing nearly 60% of capital raised for Latin American PE funds between 2002 and 2008.

However, growth of the asset class is diversified across the region, with local and countrydedicated PE funds emerging beyond Brazil. Mexico, Colombia, Peru, Argentina and Chile in particular are drawing interest and capital not only from overseas PE investors, but also from Latin American regional funds that are increasingly looking for opportunities beyond the Brazilian market.

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