By Jorge Porter
September 15, 2011— Fundraising for Latin American private equity and venture capital (PE/VC) could hit at least a record US$10bn in 2012 given that global investors are more willing to increase their exposure to the region, Cate Ambrose, president and executive director of the Latin American Venture Capital Association (LAVCA), told BNamericas.
According to LAVCA data, PE/VC fundraising in the region grew 59% to US$4.9bn in January-June compared to the same period in 2010, with the bulk coming from Brazil.
Based on these figures, LAVCA is forecasting that 2011 is on track to surpass the record-setting total of US$8.1bn from the previous year.
“I see that there is enough global appetite to easily raise over US$10bn in 2012, and there are no signs that investors’ interest in the region will decay. But in the end it all depends on the number of managers that can raise funds in the market as large as we have seen so far,” Ambrose said.
Two funds of more than US$1bn closed in Brazil in 1H11 – BTG Pactual with US$1.6bn, and Vinci Partners with US$1.4bn. Local investment firms Pátria and Gávea closed on an additional US$3.2bn in the third quarter.
The region’s fundraising figure could see a boost if European funds and global firms such as Kohlberg Kravis & Roberts (NYSE: KKR) and Silver Lake raise funds directly aimed at the region, as they are investing more in Latin America given that developed markets continue to languish, Ambrose said.
Investors’ sustained interest in the region is reflected in the results of LAVCA’s 2011 limited partners opinion survey. Currently, 90% of global investors who participated said they are either allocating funds in Latin America or doing due diligence, up from 82% a year ago.
Furthermore, 55% indicated that they expect to increase their allocations to fund managers investing in the region over the next 12 months, with 68% planning increases in the next 36 months.
LAVCA will carry out its 2011 summit and investor roundtable in New York on September 27-28.