LAVCA | The Association for Private Capital Investment in Latin America
  • About
    • About LAVCA
    • Board, Team, & Advisors
    • Media
    • Contact
  • Members
    • Membership Benefits
    • Current Members
    • Member Access
  • Education & Programs
    • About
    • LAVCA Week
    • Calendar & Past Programs
    • LAVCA Education
  • Research & Directories
    • LAVCA Research
    • Industry data
    • LP Survey
    • Directories
  • ESG & Impact
    • Deal Book
    • LAVCA ESG Deal Awards
    • Impact Report
    • ESG Guidelines
  • Articles
    • Featured Articles
    • Industry News
  • VC
  • Member Login
  • Member Access

LAVCA | The Association for Private Capital Investment in Latin America

A non-profit member organization

  • About
    • About LAVCA
    • Board, Team, & Advisors
    • Media
    • Contact
  • Members
    • Membership Benefits
    • Current Members
    • Member Access
  • Education & Programs
    • About
    • LAVCA Week
    • Calendar & Past Programs
    • LAVCA Education
  • Research & Directories
    • LAVCA Research
    • Industry data
    • LP Survey
    • Directories
  • ESG & Impact
    • Deal Book
    • LAVCA ESG Deal Awards
    • Impact Report
    • ESG Guidelines
  • Articles
    • Featured Articles
    • Industry News
  • VC

Latin American Private Equity’s Quiet Recovery

February 2, 2005

Coral Gables, FL, February 2, 2005 – Beyond the headlines of economic crises and major investor losses, the successful track records of many of Latin America’s top venture capital and private equity fund managers go curiously unnoted. For top performers such as Darby Overseas Investments, Advent International, ZN Mexico, Conduit Capital Partners and AIG Capital, this year’s Economist Conference on Latin American Private Equity offered a public forum for exploring the quiet recovery currently underway in the region.

“In 2005 institutional investors have returned to the conference, and several came to meet with fund managers. Investors seeking out exposure to emerging markets private equity are finally willing to give Latin America another chance,” said event chairman Cate Ambrose.

Ms. Ambrose noted that volatility has decreased in markets like Mexico and Brazil, and competition for deals in Latin America is generally less intense than in China or Russia. And while many players have been discouraged by Latin America’s track record for private equity returns, those in the know say a closer examination reveals that a number of funds have had long-term success in the region.

“Global players haven’t heard enough about the high returns that are possible in Latin America. Without knowledge of regional success stories, investors can be wary of committing to the region,” said opening speaker Richard Frank, CEO of Darby Overseas Investments and Chair of the Latin American Venture Capital Association (LAVCA). “The experience of Darby and some of our colleagues in the industry has been quite positive. We need to better document activity within the region and convey our story more effectively to the investor community.”

The losses suffered by many funds in recent years were not reflected in the experiences of fund managers presenting at the conference. Darby reported four successful exits from its private equity and mezzanine funds in 2004. Luis Harvey of Nexxus Capital presented the high returns to investors yielded from their first fund managed jointly with Zephyr, ZN Mexico Trust I, and highlighted the positive results to date of the second ZN Mexico fund.

Of particular interest to participants were the five venture-backed Latin American IPOs of 2004, which included the highly successful offerings of HOMEX—financed by ZN Mexico—and Gol Aerolineas—financed by AIG Capital Partners.

Funds with quality management teams and deep local expertise have demonstrated strong staying power and have encouraged the entry of new players. The Carlyle Group recently opened an office in Mexico, staffed with a local management team chosen for the depth of its expertise within the Mexican market. And institutional investor CalPERS has dedicated US$30 million to Latin American venture capital in 2005, with US$17 million allocated to Mexico.

“Some ask why CalPERS as a global player is active in Latin America when there are high returns in Asia,” said CalPERS Portfolio Manager Joncarlo Mark. “The answer is that Latin America does offer opportunities for significant returns, and as a global player we are strengthened by our involvement in all regions.”

Another benefit to having a quality management team emerged during the conference–better returns. Cynthia Hostetler, Vice-President of Investment Funds for the Overseas Private Investment Corporation (OPIC), stated that OPIC has consistently found the quality of fund managers to be critical to fund performance. Ms. Hostetler noted that, regardless of region or market maturity, significantly higher returns are produced by top quartile fund managers in comparison with those in the lowest quartile. OPIC, one of the largest equity investors in emerging markets and a LAVCA Advisory Board member, has invested US$800 million in Latin America over the course of its investment program, with US$250 million of that invested in four funds in 2004 and early 2005.

Conference presenter Álvaro Gonçalves, partner and director of Stratus Investimentos and President of the Brazilian Venture Capital and Private Equity Association (ABVCAP), said he felt Latin America deserved better consideration based on the concrete results of dependable fund managers such as Advent International, one of many who remained consistently active in the region despite difficult times.

“In the region’s peak allocation in the late 1990s, investors didn’t always choose disciplined, committed players, as the private equity business requires,” said Mr. Gonçalves. “In many cases, elected fund managers acted as aggressive cowboys, driven by high profile transactions. Many disappeared after the first signs of difficulty and tried to blame the region for their failures. Such cases unfortunately drove a negative perception, but there are many successful cases now available for assessment.”

Christina Kappaz, LAVCA Executive Director, added that conference participants were generally optimistic on the region’s future prospects. “Analysis of Latin American private equity often fails to take into account that the industry is just completing its 1st cycle of industry maturation, while the U.S. market is in its 5th cycle and Asia in its second or third,” said Ms. Kappaz.

The emergence of venture capital associations at the national and regional level in Latin America is a positive sign of the maturation of the industry, noted Susana Garcia-Robles, an Investment Officer with the Inter-American Development Bank’s Multilateral Investment Fund. The MIF, which has committed over US$300 million in investments to venture capital funds in the region, is supporting efforts of associations such as LAVCA to facilitate networking, undertake research, and provide education to industry players.

Many of the next steps identified by conference participants for sustaining the industry’s positive growth are priority actions for LAVCA in the coming year, noted Ms. Kappaz.

“We see 2005 as a particularly critical year for promoting the industry’s growth, given the global recovery and regional momentum on many levels,” said Ms. Kappaz. “In 2005 LAVCA members will be at the forefront of a variety of research, networking, and information-sharing initiatives, as well as highly visible promotion of industry success stories to international investors.”

LAVCA’s mission is to promote the growth of the venture capital and private equity industry in Latin America and the Caribbean through research, education, networking, best practices, and the advocacy of sound public policy. LAVCA is a not-for-profit trade association serving a core membership of venture capital and private equity firms that invest in emerging companies in the region.

For more information on LAVCA and its activities please visit www.lavca.org.

Contact:
Ramona DeNies
LAVCA
1 (503) 239-7449
[email protected]

Latin American Private Equity’s Quiet Recovery was last modified: December 19th, 2016 by
Economic DevelopmentPrivate EquityVenture Capital
0
Facebook Twitter Google +

Leave a Comment

You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign up for LAVCA’s bi-weekly Latin American Private Capital Update and the LatAm Venture Bulletin, produced specifically for venture investors, entrepreneurs, and technology startups in the early stage ecosystem.






Which LAVCA Newsletter would you like to receive?

VC Partner Events

  • VC Trends in Latin America: H1 2022

    August 23, 2022–August 23, 2022
  • LAVCA Encontro Anual Brasil 2022

    August 30, 2022–August 30, 2022

Tweets

  • Nicolás Szekasy https://t.co/kMv2IUnfbA

    11-Aug-2022

    Reply Retweet Favorite
  • #LAVCAWeek2022 is taking place in person Oct. 11-14 in NYC! Speakers include: Tania Sztamfater Chocolat (… https://t.co/uNg10qSqwx

    09-Aug-2022

    Reply Retweet Favorite
  • Today's top takeaways from the #LatAmVentureBulletin: https://t.co/JY9CRvO0hW https://t.co/KUabMLOT2U

    05-Aug-2022

    Reply Retweet Favorite
  • Leading VCs and tech investors active in Brazil are invited to join LAVCA's #EncontroAnualBrasil. Program highlight… https://t.co/9vWiCTnyuh

    05-Aug-2022

    Reply Retweet Favorite
  • Registration for #LAVCAWeek2022 is now open for all qualified institutional investors LAVCA Members and non-members… https://t.co/iiv4YQSuUc

    03-Aug-2022

    Reply Retweet Favorite

Submit VC News

Have private equity or venture capital related news that you would like to share? Submit your press releases and news to [email protected].

VC Industry News

  • Monashees and Andreessen Horowitz Lead USD10m Seed Round for NG.CAS

    August 2, 2022
  • Canary Leads USD6m Pre-Seed Round for Colombia’s Bia

    July 27, 2022
  • Swvl To Acquire Mexico’s VC-backed Urbvan for USD82m

    July 11, 2022
  • Tiger Global Leads USD15m Series A for Colombia’s treble.ai

    July 1, 2022
  • Goldman Sachs Asset Management Leads ~USD38m Series C for Brazil’s Conexa Saúde

    June 27, 2022
  • Vine Ventures Reaches USD140m Final Close for Seed-stage Venture Fund

    June 22, 2022
  • Ecuadorian Fintech Kushki Raises USD100m Series B+ at USD1.5b Valuation

    June 7, 2022
  • Vinci Partners Acquires USD20m Stake in Brazilian Credit Provider DMCard

    February 21, 2022
  • 8VC Leads ~USD35.4m Round for Brazilian Insurtech 180 Seguros (em português)

    February 2, 2022
  • Glade Brook Capital Leads USD125m Series C for Chilean Insurtech Betterfly

    February 2, 2022
  • SP Ventures and Acre.VC Lead USD10m Series A for Brazilian Carbon Trading Marketplace Moss (em português)

    January 31, 2022
  • Brazilian Healthtech Nilo Saúde Raises USD10m Series A from Canary, MAYA, SoftBank, GFC and Tau Ventures

    January 28, 2022
  • Valor Capital Group Leads ~USD16m Series A for Brazilian Agtech Agrolend (em português)

    January 23, 2022
  • DILA Capital and Kayyak Ventures Lead USD15m Series A for Mexican Financing Platform Fairplay

    January 18, 2022
  • Astella Investimentos Leads ~USD4.6m Seed Round for Brazilian Blockchain Trading Platform Gavea (em português)

    January 12, 2022
  • SoftBank Leads USD48m Series B for Colombian E-commerce Laika

    January 12, 2022
  • KASZEK Leads USD13.2m Round for Mexican Fantasy Sports Platform Draftea

    January 7, 2022
  • IDC Ventures Leads ~USD5m Series A for Brazilian Microcredit Platform SuperSim (em português)

    January 6, 2022
  • Mexican Verification Platform MetaMap Raises USD70m Series B

    January 5, 2022
  • DRADS Capital Leads USD7m Pre-Series A for Chilean Foodtech The Live Green Co. (en español)

    January 3, 2022
  • SoftBank Leads USD127m Round for Brazilian Healthcare Provider Alice

    December 21, 2021
  • DILA Capital and ALIVE Ventures Lead USD14m Series A for Edtech Slang

    December 20, 2021
  • Astella Investimentos and SoftBank Lead ~USD3m Seed Round for Brazilian Automation Platform BotCity (em português)

    December 20, 2021
  • GIC Leads USD80m Round for Colombian POS Lending Platform ADDI (em português)

    December 20, 2021
  • Yara Growth Ventures Leads USD30m Series C for Argentine Agtech Agrofy (em português)

    December 16, 2021
  • Tiger Global Leads USD60m Series B for Mexican Freight Platform Nowports

    December 16, 2021
  • SoftBank Leads ~USD120m Round for Brazilian Fintech OpenCo (em português)

    December 15, 2021
  • DN Capital Leads ~USD22.2m Series A+ for Brazilian Healthtech Sami

    December 14, 2021
  • Riverwood Capital Leads ~USD52m Series B for Brazilian Fiscal Management Platform Arquivei (em português)

    December 14, 2021
  • KASZEK Leads USD2.7m Seed Round for Peruvian Edtech Crack the Code

    December 13, 2021
  • GIC Leads ~USD32m Series C for Brazilian Delivery Platform Shopper (em português)

    December 13, 2021
  • Tiger Global Leads USD20.5m Round for Mexican Freight Platform Nuvocargo

    December 10, 2021
  • Advent International and SoftBank Lead USD60m Series B+ in E-Commerce Aggregator Merama

    December 9, 2021
  • Volpe Capital Leads ~USD5m Series A for Brazilian Corporate Governance Platform Atlas Governance

    December 8, 2021
  • Lachy Groom Leads USD14.8m Series A for Brazilian Fintech Stark Bank (em português)

    December 8, 2021
  • Prosus Ventures Leads USD60m Series B for Colombian Edtech Platzi

    December 6, 2021
  • KASZEK Leads USD10m Series A for Brazilian Workspace Marketplace Beer or Coffee (em português)

    November 30, 2021
  • Galapagos Capital Invests ~USD20m in Brazilian Cosmetics MedBeauty (em português)

    November 18, 2021
  • Oak HC Leads USD27m Series A for Mexican Payment Platform Aplazo

    November 15, 2021
  • Colombian E-commerce Fulfillment Platform Melonn Raises USD4.5 Seed Round

    November 3, 2021
  • DNA Capital, Temasek and Fit Participações Lead ~USD20m Round for Brazilian Healthtech Memed

    November 1, 2021
  • Astella Investimentos Leads ~USD5m Round for Brazilian Proptech Homelend (em português)

    October 28, 2021
  • KASZEK Leads USD8m Round for Brazilian Car Documentation Platform Gringo

    October 27, 2021
  • SoftBank Leads USD75m Series C for Brazilian BPO Platform Pipefy

    October 26, 2021
  • Mexican Delivery Platform Skydropx Raised USD20m Seres A from Cometa, Base10 Partners, 645 Ventures

    October 26, 2021
  • Brazilian Car Insurtech Justos Raises ~USD35.8m Series A from SoftBank, KASZEK and Others

    October 25, 2021
  • Andreessen Horowitz and Base Partners Lead USD15m Series A for Colombian Foodtech Foodology

    October 22, 2021
  • Unbox Capital Leads USD30m Series B for Brazilian Marketing Platform Rock Content (em português)

    October 22, 2021
  • L Catterton Leads Investment in Mexican DTC Eyewear Brand Ben & Frank

    October 21, 2021
  • Anthos Capital Leads USD18m Series A for Venezuelan Delivery Platform Yummy

    October 21, 2021
  • Flourish Ventures and GFC Lead USD10m Series A for Brazilian Wholesale Marketplace Merce do Bairro

    October 21, 2021
  • Tiger Global Leads USD35m Series A for Argentine Fintech Pomelo

    October 21, 2021
  • Brazilian Wholesale Marketplace Inventa Raises ~USD6m Seed Round (em português)

    October 20, 2021

About LAVCA

 

LAVCA is the Association for Private Capital Investment in Latin America, a not-for-profit membership organization dedicated to supporting the growth of private capital in Latin America and the Caribbean through research, education, networking and advocacy.

LAVCA Office

    New York City:
    589 8th Ave, 18th Floor
    New York, NY 10018

Explore LAVCA.org

  • About LAVCA
  • Board, Team, & Advisors
  • Media
  • Contact Us
  • Membership Benefits
  • Members Only Access
  • Education and Programs
  • Research
  • Policy
  • LAVCA VC
  • Contact Us

@2020 - LAVCA. All Rights Reserved.


Back To Top