Latin America
Private equity in Latin America is in a period of resurgence. Following a rapid buildup of investment in the 1990s, peaking at US$5 billion in 1998, many investors were stung by a period of disappointing returns 2001–2003. Investment in Latina American fell to a low of US$630 million in 2004. However, investor interest has returned in earnest. Funds focused on the region raised US$7 billion in 2006 and 2007, compared to US$6.1 billion raised between 2000 and 2005. PE firms invested more than US$12 billion in 2006–2007.
EMPEA’s Surveys of LP Interest in EM PE confirm investors’ growing confidence in the region: in 2008, 65% of institutional investors surveyed expected to invest in the region in the next 3-5 years, versus 40% investing there currently. This rekindled investor interest in the region is in part the result of improved performance. Latin American three-year returns have recovered, rising from a –21% pooled IRR in 2003 to +27% in 2007. Growing fund sizes in the region reflect renewed investor interest. Two regional GPs broke fundraising records in 2007 with Latin American funds topping US$1 billion each.
With 33% of the region’s population and GDP, Brazil has led Latin America’s private equity renaissance. Funds focused on Brazil represented 60% of PE capital raised in 2006 and 2007. Brazil drew 50% of investment during the same period.
Additional Resources:
EMPEA Research
(Available exclusively to EMPEA Members)
- Quarterly Review Lat Am ex-Brazil
- EMPEA Insight: Brazil
Members, please login here to access the files.
Related Links
back