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Private equity investment in Brazil fell 31 percent in 2015

Published 2016-03-03, 12:57 p/m
© Reuters. Private equity investment in Brazil fell 31 percent in 2015

SAO PAULO, March 3 (Reuters) - Private equity and venture
capital firms sharply reduced the value of their investments in
Brazil last year, reflecting an economic downturn, political
crisis and currency devaluation.
Brazil remained the largest market for private equity and
venture capital investments in Latin America, receiving $3.2
billion. But that amount fell 31 percent in dollars, with fewer
sales of big companies. In reais, investments fell 11 percent,
according to data released on Thursday by the Latin American
Private Equity and Venture Capital Association (LAVCA).
The firms flocked to Mexico, in which the investments rose
72 percent to a record $2.3 billion.
"International private equity investors are responding to
the opportunities generated by Mexico's ambitious energy
reform," said LAVCA President Cate Ambrose in a report.
Investment in the region was stable at $6.5 billion.
While traditional private-equity firms are dealing with the
impact of the currency devaluation on their returns and the
severest recession in Brazil in decades, there may be
opportunities for select international investors, LAVCA said.
Examples include Europe's CVC, which recently opened an
office in Sao Paulo, Canadian pension fund CPPIB, which is
expanding its activities in the country, and investors
specialized in distressed assets.
Infrastructure will be one of the most active sectors this
year, according to LAVCA.
Investing in infrastructure seems a good hedge against the
red-hot inflation caused by depreciated local currencies. Latin
American-focused private equity and venture capital funds raised
$7.2 billion in 2015, according to LAVCA.

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