(The Rio Times) Brazil’s Social and Economic Development Bank, BNDES, announced this week it would allocate approximately R$60b (around US$19.4b) from a total of R$170b (approximately US$55b) of disbursements planned for 2015 towards the infrastructure sector. The volume of disbursements for the sector, forty percent of the total made by the Bank, is similar to that seen in 2014, despite the overall deterioration of Brazil’s economic scenario this year. Read more
(IFM Investors) OHL Mexico, one of the leading groups in the infrastructure sector in Mexico, and IFM Investors, a uniquely-structured global fund manager, have signed today a transaction for the acquisition of a 24.99% stake in Organizacion de Proyectos de Infraestructura (OPI) by IFM Investors. OPI owns Concesionaria Mexiquense (Conmex), the company responsible for the operation of the Circuito Exterior Mexiquense (CEM) toll road in Mexico, which has a remaining concession life of 37 years. With a length of 111 km, this toll road constitutes the north-eastern section of Mexico City’s ring road and is located in a densely populated and industrial area with a high rate of motorization. Read more
Canada Pension Plan Investment Board said on Wednesday it will open an office in São Paulo in April, intent on boosting real estate and infrastructure investments in the region even as money is flowing out of emerging markets. Read more
PRESS RELEASE: FOR IMMEDIATE RELEASE
Caitlin Mitchell, LAVCA
PRIVATE EQUITY FIRMS DRIVE RECORD INFRASTRUCTURE INVESTMENTS IN LATIN AMERICA
Major Deals in Oil & Gas and Energy Boost Sector in 2013
New York, December 16, 2013 – Private equity investors will commit a record amount to infrastructure-related deals in Latin American in 2013, according to a proprietary report published today by The Latin American Private Equity & Venture Capital Association (LAVCA). Compared to US$3.3b invested in 2011 and US$1.7b invested in 2012, preliminary findings show a total of over US$3.5b deployed by private equity investors in infrastructure in Latin America in 2013. Activity in the last few months has been accelerated by major deals in the oil & gas sector.
Among the significant transactions completed in 2013, in September Capital International (CIPEF) invested in Brazil-based QGOG Constellation, a provider of offshore and onshore oil & gas contract drilling. Earlier this month, Advent International completed an acquisition of a minority stake in Colombia’s Ocensa oil pipeline for US$1.1b, the largest deal closed for 2013.
“It is well recognized that many major Latin American countries face a deficit in the infrastructure necessary to support the region’s growth. Advent has identified some attractive opportunities in this space in recent years, including the deal announced in Colombia earlier this month,” said Patrice Etlin, Managing Partner of Advent International and Chairman of LAVCA.
“The interest in infrastructure-specific investments in Latin America has grown considerably, expanding from a niche sector of the private equity market into an important opportunity within the alternative assets industry,” said Juan Savino, Director of Research, LAVCA. “The deals closed in 2013 demonstrate that despite some regulatory challenges, private equity investors are anticipating that they can generate private equity-like returns from the right type of deal in infrastructure-related sectors.”
According to the report, activity in Brazil and Colombia in energy, renewables, and oil & gas was particularly dynamic. Given the expectations around the impending energy reform in Mexico, infrastructure is poised to remain a sector of great interest to investors.
LAVCA’s report, Private Equity in Latin America – Sector Focus: Infrastructure & Energy, is available to members and can be purchased by non-members online here.
For the purposes of the report, LAVCA looks at infrastructure in terms of investment activity. LAVCA identifies six main sectors for private equity infrastructure: energy, oil & gas, transportation infrastructure, telecommunications, renewable energy, and logistics.
About the Latin American Private Equity & Venture Capital Association
The Latin American Private Equity & Venture Capital Association is a not-for-profit membership organization dedicated to supporting the growth of private equity and venture capital in Latin America and the Caribbean. LAVCA’s membership is comprised of over 160 firms, from leading global investment firms active in the region to local fund managers from Mexico to Argentina. Member firms control assets in excess of US$60b, directed at capitalizing and growing Latin American businesses. LAVCA’s mission – to spur regional economic growth by advancing venture capital and private equity investment – is accomplished through programs of research, networking forums, education and advocacy of sound public policy. More information at www.lavca.org