By Joe Leahy
(Please note: This is an excerpt of the original article. Click here to read the article in the Financial Times.)
June 28, 2011— In Brazil, the chances are that if you eat a burger, go to college or travel to Miami, you will be putting money into the pockets of private equity firms.
A boom in the industry in Latin America over the past few years has led to a host of new deals, with a Brazilian private equity firm, Vinci Partners, holding the local franchise for Burger King, and others, such as Advent International, targeting Brazil’s fast-growing education sector.
While the last five years have been upbeat – companies raised $8.1bn for Latin America as a whole last year and are expected to have $10bn-$11bn available for investment in Brazil alone by the end of 2011 – it has not always been this good.
The increase in private equity money chasing deals in Brazil has led to concern that the market is becoming saturated. But Brazil’s private equity environment remains relatively under-developed compared with the US.
Brazil also has the advantage of being the most culturally similar emerging market for US and European funds, says Cate Ambrose, president of Latin American Venture Capital Association.
She said: “Brazil is much closer to the European and US business culture of working with financial investors, building up the company and eventually selling it”.