(Bloomberg) August 18, 2010 – Larrain Vial SA’s brokerage plans to manage initial public offerings for at least three Chilean companies over the next year following the nation’s eight-month drought, the unit’s chief executive officer said.
Chile’s last IPO was in December, when Cruzados SADP, which runs the Universidad Catolica soccer team, raised $25 million. The other sales last year were retailer Empresas Hites SA and casino operator Enjoy SA.
“They are all medium- to big-sized companies,” Manuel Bulnes, CEO of Larrain Vial SA Corredora de Bolsa, Chile’s largest non-banking securities brokerage by profit, said of the companies that are planning IPOs. He spoke in an interview in Santiago yesterday.
Valuations in the Chilean equity market make share sales “very attractive” for companies, Bulnes said. Chile’s IPSA index has climbed 26 percent this year and rose to a record on Aug. 9. The measure trades at 22 times reported earnings, near the highest since November 2007. Chile has a “sophisticated” pool of potential IPO investors, including pension funds, insurance companies and mutual funds, Bulnes said.
Larrain Vial also plans to raise $500 million from institutional clients in Chile, Peru, Colombia and Mexico for a private equity fund of funds to invest in developed markets and is working with HarbourVest Partners LLC, Bulnes said. The brokerage raised a similar amount from investors for private equity firm Blackstone Group LP, Bulnes said.
“I don’t see any reason why we can’t raise approximately $500 million to invest with HarbourVest,” Bulnes said. “Today more than ever, investors from emerging markets are available to participate in investments in the developed world.”
Larrain Vial is advising Laboratorios Recalcine SA on an IPO, Diario Financiero reported July 5. Bulnes declined to say which companies the brokerage is helping take public.
By Eduardo Thomson