By Cardiff de Alejo Garcia
Financial News (via Dow Jones Newswires)
April 13, 2010 – Private equity in Latin America weathered a difficult 2009 better than in the rest of the world, according to new analysis released in the same week that Advent International revealed it had closed the largest-ever buyout fund in the region.
According to a survey conducted by the Latin America Venture Capital Association, or Lavca, private equity and venture capital investment in the region last year totaled $3.3bn (€2.4bn), a decline of 29% from the previous year, while fundraising declined 43% to $3.6bn.
However, this still compares favourably to the 61% decline in fundraising worldwide, according to data from researcher Preqin.
Cate Ambrose, president of Lavca, said the investment results were unsurprising given the global economy last year, but that the more important conclusion from the survey “is that fundraising for PE in Latin America was relatively robust as compared to other global markets, and that trend is accelerating in 2010 as international investors seek exposure to growth economies such as Brazil, Colombia and Peru”.
Brazil, the largest country in the region, received 45% of the investments, followed by Mexico with 14%. The number of early stage and seed deals in the region also increased, according to the survey.
In a related development, private equity firm Advent International closed its fifth fund in the region at $1.65bn – the region’s largest on record, according to the firm, which added that the fund “will focus on control buyouts and expansion financings of companies across the region, investing mainly in Brazil, Mexico and Argentina”.
The fund, which was oversubscribed and attracted 51 investors, typically invests between $50 to $200m in each portfolio company.
Ambrose said: “Advent’s announcement coupled with the increase of enquires we’re receiving at LAVCA about who is fundraising in the region, shows that Latin America is well-positioned for growth in 2010.”