May 29 (Reuters) – Bain Capital LLC is contemplating a Latin America-focused investment fund in the next three to five years, one of its managing directors said on Wednesday, making it the latest private equity firm to consider such a move.
Buyout firms such as Carlyle Group LP and Advent International Corp have flocked to the continent, lured by its growing middle class as they invest primarily in consumer-related sectors, though also in healthcare, technology and financial services.
Private equity and venture capital firms committed $7.9 billion to investments in Latin America in 2012 – a five-year high and a 21 percent increase from 2011, according to the Latin American Private Equity and Venture Capital Association.
“I think after we do a couple of more investments, we may look down the road at doing a specific regional fund in the next three to five years,” Bain managing director Stephen Pagliuca told Reuters on the sidelines of the association’s Chile forum.
Bain closed the purchase of Telefonica SA’s Latin American call-centerbusiness, Atento, for an enterprise value of about 1.1 billion euros ($1.36 billion) in December. Pagliuca said that transaction encouraged Bain to consider more deals in the region.
“We take a kind of a toe-in-the-water approach and we expand from there. I think that our toe in the water in this region has been Atento,” Pagliuca said.
“We try to size the funds small so we can be selective. So even in Asia our first fund was $500 million and our first fund in Europe was $500 million, and our fund in Asia is now $2.3 billion… but I don’t think we have a specific range yet,” Pagliuca added, when asked about the possible size of a Latin American fund.
Last summer, Bain said it had completed fundraising for its second Asia fund, raising $2.3 billion, which included $300 million contributed by Bain executives.
Bain’s third European buyout fund raised 3.5 billion euros ($4.5 billion) in 2008.
In the absence of a specific fund for Latin America, Bain has the option to tap its North America-focused private equity fund. Bain has secured about $2.35 billion from investors for its latest flagship North America-focused fund, excluding a $600 million commitment from the firm’s fund managers, according to a regulatory filing released last month. The fund has a $6 billion target.
“We can take out as much as we need, but we’d probably bias the (North American) funds to be 80 percent to 90 percent North American, but that’s still a lot of capital because it will be a $6 billion fund,” Pagliuca said.
In Latin America, Bain would likely look at business sectors in which it is already active in the United States, Pagliuca said.
“Businesses that take advantage of regional scale in technology are interesting. We have a lot of expertise in healthcare so… we’re starting to look at some opportunities in healthcare and insurance,” Pagliuca said.
“We’ve done financial services, we own WorldPay in London. It’s the largest credit-card processor in the United Kingdom. So things like credit-card processing, we’ve looked at opportunities in Latin America,” he added.
With about $70 billion of assets under management, Bain is one of the world’s largest buyout firms. Its investments include retailer Toys ‘R Us, child care provider Bright Horizons Family Solutions and television network The Weather Channel.
The Boston-based buyout firm has eight offices on three continents, according to its website, including in New York, London, Munich, Hong Kong, Shanghai, Tokyo and Mumbai.
For Spanish press release click here
(Press Release) (Mexico City, April 10, 2013) EMX Capital is pleased to announce the closing of EMX Capital Partners LP with total capital commitments of U.S.$68.2 million from local and international investors. EMX Capital Partners LP will invest alongside EMX’s Mexican side-by-side vehicle, which has funding of Ps.1,544 million pesos from Mexican pension funds (approximately U.S.$124.1 million). Therefore, the combined vehicles (“EMX Capital Partners I”) have obtained U.S. $192.3 million of capital. Read more
By Guillermo Parra-Bernal and Aluísio Alves
April 3, 2012 – Buyouts led by private equity and sovereign wealth funds should help propel merger and acquisition activity in Brazil this year after a flat first quarter, according to investment bankers.
Even as an economic slowdown and buyer caution put the brakes on dealmaking, Brazil’s diversified economy – the world’s sixth-biggest and Latin America’s largest — still lured a large number of sophisticated investors, Thomson Reuters said in its quarterly M&A report.
Companies announced about $21.95 billion worth of deals in Brazil in the first quarter, up 5.6 percent from a year earlier, the report showed. The number of deals — 175 — was nearly unchanged from 174 in the first quarter of 2011.
Brazil’s economy slowed abruptly in the second half of last year and is unlikely to rebound strongly before June. So far this has only slightly weakened Brazil’s bustling job market, the nation’s main engine of growth in recent years, but has hampered manufacturing and lessened incentives for companies to
merge, some analysts said.
Bankers expect M&A activity to gain traction in coming months as retail, consumer goods and infrastructure companies try to add scale and financial muscle by tying up with rivals. Global buyout firms, flush with cash after raising $6.3 billion for their Brazil investments in 2011, may drive such a recovery.
Take private equity, for instance. About half of last year’s Latin American buyouts took place in Brazil, where 64 percent of the region’s capital commitments were invested, the New York-based Latin American Venture Capital Association said last month.
“Investors are ready to invest heavily and do the long-term investment in the country,” said Jean Dreyer, a managing director for Citigroup’s global investment banking unit. “The market is very positive, and this should continue for a long period.”
Citigroup Global Banking & Markets, as the unit is known, led the first-quarter rankings in Brazil based on deal value after advising on two transactions worth a combined $8.15 billion, the data showed.
Citigroup’s Brazil bankers, led by industry veteran André Kok, advised banking giant Itaú Unibanco Holding on its $6.82 billion plan to take card payment company Redecard private.
Kok, who last year left Itaú Unibanco’s Itaú BBA investment banking unit after six years there, also led the team advising Infravix and partners on the purchase of a $1.33 billion license to remodel and operate the Brasilia airport.
Citigroup also was one of two advisers for Abu Dhabi state investment fund Mubadala’s purchase of a $2 billion stake in Brazil’s EBX, an investment holding company controlled by Eike Batista, the nation’s richest man. The deal was not included on the rankings because it took place between Mubadala
and a U.S.-based investment firm controlled by Batista.
Mubadala oversees $46 billion in assets.
The other adviser to Mubadala was Goldman Sachs Group. Itaú BBA, which ranked second in the quarter with advisory work on deals worth $7.82 billion, helped EBX on the transaction.
“The Mubadala deal is a proxy of what we could see in coming months, as Brazil continues to attract strategic pools of new capital and more sophisticated investor classes,” said Fernando Iunes, global head of investment banking for Itaú BBA.
Itaú BBA worked on nine deals, more than any other top 20 firm in the rankings during the first quarter, the Thomson Reuters data showed.
The nine transactions included CPFL Energia’s $683 million purchase of utilities BVP and SPE Lacenas
Participações between the end of February and the beginning of this month.
Itaú BBA was also one of the advisors to parent Itaú Unibanco Holding on the Redecard deal.
Foreign and local banks kept betting on investment banking as a stable source of earnings despite the slower economy and a possible slump in fees. Fees in Brazil probably fell to about $800 million last year from $1.1 billion in 2010, according to estimates from leading investment bankers.
“All the major investment banks have a presence in Brazil,” Citigroup’s Dreyer said. “In terms of fees … the competition is adding some pressure, but this is not surprising as Brazil isa mature and sophisticated market.”
BR Partners, an independent investment banking firm led by former Citigroup and Goldman Sachs banker Ricardo Lacerda, clinched the third spot in rankings by advising on deals worth $7.08 billion.
By Guillermo Parra-Bernal
September 14, 2011 — Buyout firms investing in Latin America raised 59 percent more in funds in the first half of this year, mostly due to growing interest among the biggest global private equity firms, the Latin American Venture Capital Association on Wednesday.
Even as momentum built up in Mexico, Colombia, Peru, Chile and Argentina, where less competition for existing assets has brought the attention of dealmakers, Brazil lured two-thirds of total fund-raising through June, LAVCA, as the group is known, said in a statement.
Buyout firms raised $4.9 billion in the period, compared with $3.1 billion a year earlier. According to Cate Ambrose, president of New York-based LAVCA, the strong results for the first half put 2011 on track to surpass the record-setting total of $8.1 billion raised from investors last year.
“As developed markets continue to languish, we are seeing an increased appetite from global limited partners to increase their exposure in Latin America,” Ambrose was quoted in the statement as saying. “We expect this trend to continue.”
The numbers highlight the growing allure of Latin American countries as a destination for global capital, as a debt crisis and the effects of the financial crisis of late 2008 hindered some of the world’s most developed markets.
Torrid activity in local capital markets at the start of the year also allowed buyout firms to exit their investments, helping investors recycle fresh capital for new ventures, LAVCA said.
Exits, or the way private equity and venture capital firms offload some of their investments, amounted to $8.9 billion between January and June — surpassing all of 2010, LAVCA said. The group said that 33 private equity-backed exits took place in the period, led by initial public offerings in the region’s main stock exchanges.
A LAVCA poll found that 90 percent of the investors surveyed this year are either allocating to funds in Latin America or finalizing their investments, up from 82 percent a year ago.
Fifty-five percent of them signaled that more money could be allocated to Latin America-dedicated buyout funds over the next 12 months. More than two-thirds of the sample could ramp up their commitments to Latin America private equity investments over the next three years.
LAVCA also said that 65 investments were made in the first half of the year, in line with the same period of last year. However, the value of deals was down 30 percent to $2.7 billion from $3.8 billion a year earlier, reverting a trend that had begun late in 2009.
A number of smaller deals were captured, with 63 percent of investments totaling less than $25 million, compared with a ratio of 45 percent a year ago.
Capital committed remains heavily weighted toward Brazil, with Sao Paulo-based banking powerhouse BTG Pactual [BTG.UL] raising $1.6 billion and rival Vinci Partners, formed by former Pactual partners, getting $1.4 billion from investors.
Patria Investimentos, in which The Blackstone Group (BX.N: Quote, Profile, Research, Stock Buzz) bought a stake last year, and Gavea Investimentos, in which JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research, Stock Buzz) also became a partner, closed on an additional $3.2 billion in the third quarter.
(Reporting by Guillermo Parra-Bernal, editing by Dave Zimmerman)
Por Guillermo Parra-Bernal
September 14, 2011 – Firmas que invierten en participaciones en Latinoamérica recaudaron un 59 por ciento más en fondos en el primer semestre, debido creciente interés entre las mayores empresas de capital privado global, dijo el miércoles la Asociación Latinoamericana de Capital Emprendedor.
Pese a que aumentó el impulso en México, Colombia, Perú, Chile y Argentina, donde una menor competencia ha llamado la atención de los negociadores, Brasil atrajo dos tercios de la recaudación de fondos total hasta junio, dijo LAVCA, como es conocido el grupo, en un comunicado.
Empresas que compran participaciones recaudaron 4.900 millones de dólares en el período, que se comparan a 3.100 millones de dólares hace un año.
Según Cate Ambrose, presidenta de LAVCA, con sede en Nueva York, los fuertes resultados para la primera mitad del 2011 hacen pensar que a final de año el total superará el récord de 8.100 millones de dólares recaudados el año pasado.
“Mientras que mercados desarrollados siguen languideciendo, vemos un aumento del apetito de socios globales limitados para elevar su exposición en Latinoamérica”, afirmó Ambrose en el comunicado.
“Esperamos que esta tendencia continúe”, agregó.
Las cifras ponen de manifiesto el creciente atractivo de los países latinoamericanos como destino para el capital global, mientras una crisis de deuda y los efectos de la crisis financiera de fines del 2008 golpearon a los mercados más desarrollados del mundo.
La tórrida actividad en mercados locales de capital a comienzos de año también permitió que empresas que compran participaciones dieran salida a sus inversiones, lo que ayudó a los inversores a reciclar capital fresco para nuevos negocios, afirmó LAVCA.
Las salidas, o el modo en que las empresas de capital privado y de capital de riesgo descargan algunas de sus inversiones, sumaron 8.900 millones de dólares entre enero y junio, con lo que sobrepasaron a todo el 2010, sostuvo LAVCA.
Un sondeo de LAVCA arrojó que un 90 por ciento de los inversores consultados este año están colocando fondos en Latinoamérica o finalizando sus inversiones, más que el 82 por ciento de hace un año.
Un 50 por ciento de ellos señaló que podría destinar más dinero a fondos de participación en Latinoamérica en los próximos 12 meses.
Más de dos tercios de los encuestados podrían elevar sus compromisos con inversiones de capital privado en Latinoamérica en los próximos tres años.
(Reporte de Guillermo Parra-Bernal. Editado en español por Luis Azuaje