Groundbreaking Report Presents New Data and Trends on Private Equity and Venture Capital in Latin America
A new report issued by the Latin American Venture Capital Association (LAVCA) indicates that a range of factors are contributing to the expansion of private equity and venture capital in the region, despite a slowdown in 2008 investment activity due to economic and market uncertainty.
Strong internal demand from an expanding middle class in the key markets of Brazil, Mexico, Colombia, Chile and Peru have created attractive opportunities for PE and VC firms, at the same time that local pension funds have become an important source of capital for fund managers in Brazil, Colombia and Peru specifically.
The 2009 LAVCA Industry Report highlights the findings of the first regional survey of private capital firms investing in Latin America, executed in collaboration with faculty and students of the Wharton School at the University of Pennsylvania.
Over 95% of the largest global and local funds active in Latin America completed the survey, with 110 firms reporting 2008 fundraising, investments and exits. Firms reported 200 investments for a total of $4.6 billion, and 56 exits totaling $2.6 billion. Fundraising was reported as $6.4 billion, with new commitments from local and global investors.
Investments and exits completed in 2008 indicate a drop of between 30-60% from 2007, when activity peaked as a result of booming exports and global market liquidity. But 2008 fundraising appears to have increased as large firms raised record funds early in the year.
Information gathered from the survey of private capital firms was complemented by an opinion survey of global institutional investors and dozens of interviews with fund managers and other market participants.
The report includes an analysis of investments by market and sector, which reveals a concentration of deals in housing, healthcare, retail, education and other sectors driven by the needs of an expanding middle-class population.
On the fundraising side, a number of new funds were raised in Brazil, Colombia and Peru with commitments from local pension funds, and anecdotal evidence indicates that local high net worth investors are taking a more active role investing with local private capital managers.
A section of the report also focuses on the changing investment environment in 2009, with many private equity firms predicting that 2009 will be one of the best vintage years for investments in several cycles. Throughout Latin America, companies with healthy business models have been affected by economic slowdown and currency depreciation and need capital to survive, and valuations are generally competitive compared to other emerging markets.
Groundbreaking Report Presents New Data and Trends on Private Equity and Venture Capital in Latin America
New York, May 12, 2009 – A new report issued by the Latin American Venture Capital Association (LAVCA) indicates that a range of factors are contributing to the expansion of private equity and venture capital in the region, despite a slowdown in 2008 investment activity due to economic and market uncertainty.
Strong internal demand from an expanding middle class in the key markets of Brazil, Mexico, Colombia, Chile and Peru have created attractive opportunities for PE and VC firms, at the same time that local pension funds have become an important source of capital for fund managers in Brazil, Colombia and Peru specifically.
The 2009 LAVCA Industry Report highlights the findings of the first regional survey of private capital firms investing in Latin America, executed in collaboration with faculty and students of the Wharton School at the University of Pennsylvania.
Over 95% of the largest global and local funds active in Latin America completed the survey, with 110 firms reporting 2008 fundraising, investments and exits. Firms reported 200 investments for a total of $4.6 billion, and 56 exits totaling $2.6 billion. Fundraising was reported as $6.4 billion, with new commitments from local and global investors.
Investments and exits completed in 2008 indicate a drop of between 30-60% from 2007, when activity peaked as a result of booming exports and global market liquidity. But 2008 fundraising appears to have increased as large firms raised record funds early in the year.
Information gathered from the survey of private capital firms was complemented by an opinion survey of global institutional investors and dozens of interviews with fund managers and other market participants.
The report includes an analysis of investments by market and sector, which reveals a concentration of deals in housing, healthcare, retail, education and other sectors driven by the needs of an expanding middle-class population.
On the fundraising side, a number of new funds were raised in Brazil, Colombia and Peru with commitments from local pension funds, and anecdotal evidence indicates that local high net worth investors are taking a more active role investing with local private capital managers.
A section of the report also focuses on the changing investment environment in 2009, with many private equity firms predicting that 2009 will be one of the best vintage years for investments in several cycles. Throughout Latin America, companies with healthy business models have been affected by economic slowdown and currency depreciation and need capital to survive, and valuations are generally competitive compared to other emerging markets.
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About the Latin American Venture Capital Association:
LAVCA is a non-profit industry association dedicated to promoting private equity and venture capital investment in Latin America and the Caribbean. LAVCA publications include the Annual Scorecard on the Private Equity and Venture Capital Environment in Latin America.
FOR MORE INFORMATION OR TO LEARN HOW TO GET A FULL COPY OF THE REPORT, CONTACT:
Emma Epstein
[email protected]
Latin American Venture Capital Association
589 Eighth Avenue, 18th floor
New York, NY 10018
tel: 1.646.315.6735
fax: 1.212.564.6460
About the Latin American Venture Capital Association:
LAVCA is a non-profit industry association dedicated to promoting private equity and venture capital investment in Latin America and the Caribbean. LAVCA publications include the Annual Scorecard on the Private Equity and Venture Capital Environment in Latin America.