(Wall Street Journal) October 6,2010 – Patria Investimentos, the Brazilian investment firm in which Blackstone Group LP acquired a 40% stake last week, plans to raise a new private equity fund next year, said Patria founding partner and Chief Executive Luiz Otavio Magalhães.
A target hasn’t been determined for what would be Patria Private Equity Fund IV, but Magalhães predicted that the new fund would have 20% to 40% more committed capital than its predecessor, Patria Private Equity Fund III LP, which closed in 2007 with total commitments of around $630 million. That fund is more than 50% deployed, he added, having been invested in four companies.
The investment pace calls for a new fund offering sometime in 2011, Magalhães said.
Plans for raising a new private equity fund were set before Blackstone made its $200 million investment last week. While having Blackstone as a significant minority investor will affect Patria’s business in the long run, Magalhães said he doesn’t anticipate much change in the near future.
“It doesn’t affect our short-term business plan,” Magalhães said, adding that Patria will focus on its current lines of business, which include private equity, real estate, infrastructure, hedge fund and merger and acquisition advising. It will also focus on investments in Brazil, where Magalhães said opportunity abounds.
However, with Blackstone on board, “we are considering developing new products and raising new funds,” Magalhães added.
Institutional investors in Brazil, including Patria’s limited partners, for instance, would have an opportunity to invest in the Blackstone’s funds in which they aren’t already backers. The two firms’ LP bases do overlap to some extent, he added.
Patria would also be able to tap into Blackstone’s LP base for raising future funds, he said.
“Blackstone has a huge family of products, and we can benefit from their experience,” Magalhães said, adding that the investment “will enhance our business in general.”
So far, Fund III has exited one investment, in Anhanguera Educacional SA, a provider of post-secondary education. Active investments include those in logistics service provider Veloce Logistica SA and vehicle monitoring and tracking company Zatix SA.
By Shasha Dai