RIO DE JANEIRO — Private equity and venture capital investments in Latin America dropped by 10 percent in the first half of this year compared with figures in the period a year earlier, the Latin American Private Equity and Venture Capital Association said on Thursday.
Investments totaled $2.6 billion, compared with $2.9 billion during the first half of 2013, the association, which is based in New York, said in a midyear survey, which is largely dependent on self-reporting by investors.The results varied widely across individual countries.
Chile, for example, registered the largest fall, tallying just $13 million invested, compared with $309 million in the period a year earlier.
However, the drop in Brazil, Latin America’s largest economy and the regional leader in the first half, was only 5 percent. Investments added up to $1.9 billion, despite the fact that the country shut down for most of June for the World Cup soccer tournament and its economy continues to deteriorate.
Brazil has entered a recession after the national statistics agency reported a second consecutive quarter of contraction.
Still, appetite for private equity and venture capital here remains healthy. Mexico, which came in second, and Peru both experienced increases. Investments in Mexico totaled $403 million, compared with $123 million in the period a year earlier. Peru had $20 million, up from $13 million.
Colombia was relatively unchanged, landing $232 million. Information technology was the top sector in both capital raised and number of deals, the association said.
Venture capital investments in Latin America increased by 14 percent in dollar volume, to $173 million, reflecting the continuing development of a technology start-up scene here despite numerous struggles and company shutdowns.
Private equity and venture capital fund-raising for the region dropped slightly, to $3.5 billion compared with $3.8 billion in the first half of 2013. Brazil, however, experienced a significant increase, with $2.2 billion raised in the first half compared with $1.3 billion in the period a year earlier. That was not a surprise.
DealBook reported last month that private equity fund-raising in Brazil this year had already surpassed the $2.4 billion raised all of last year, based on the association’s data. Several large firms that last raised funds in 2010 and 2011 are back on the market.
The Carlyle Group, Gávea Investments and Pátria Investments, backed by the Blackstone Group, have already secured new capital this year.
The association’s chairman, Patrice Etlin, also forecast an increase. In a February interview with DealBook, Mr. Etlin said, “I believe we are going to begin to see fund-raising pick up again this year.”
Mr. Etlin, who is also a managing partner at the private equity firm Advent International, predicted at the time that “levels should be greater than they were in 2013, but not at as high as in 2010-11.”
In Mexico, fund-raising dropped to $212 million, compared with $879 million raised in the period a year earlier. That decrease was due in part to the closing of several large firms’ funds last year. The same was true for the Andean region, which tallied $578 million, a drop from $763 million.
Still, new funds, albeit smaller, are expected to be raised there by the end of this year. “This is a dynamic period for private equity fund-raising” in the region, the association’s president and executive director, Cate Ambrose, said in a statement.
She added, “We expect year-end 2014 totals to likely reach $8 billion.”
That would not surpass the $10.3 billion high-water mark set in 2011, but it would be the largest amount since then and notably more than the $5.5 billion raised in 2013.
nytimes.com
Investments totaled $2.6 billion, compared with $2.9 billion during the first half of 2013, the association, which is based in New York, said in a midyear survey, which is largely dependent on self-reporting by investors.The results varied widely across individual countries.
Chile, for example, registered the largest fall, tallying just $13 million invested, compared with $309 million in the period a year earlier.
However, the drop in Brazil, Latin America’s largest economy and the regional leader in the first half, was only 5 percent. Investments added up to $1.9 billion, despite the fact that the country shut down for most of June for the World Cup soccer tournament and its economy continues to deteriorate.
Brazil has entered a recession after the national statistics agency reported a second consecutive quarter of contraction.
Still, appetite for private equity and venture capital here remains healthy. Mexico, which came in second, and Peru both experienced increases. Investments in Mexico totaled $403 million, compared with $123 million in the period a year earlier. Peru had $20 million, up from $13 million.
Colombia was relatively unchanged, landing $232 million. Information technology was the top sector in both capital raised and number of deals, the association said.
Venture capital investments in Latin America increased by 14 percent in dollar volume, to $173 million, reflecting the continuing development of a technology start-up scene here despite numerous struggles and company shutdowns.
Private equity and venture capital fund-raising for the region dropped slightly, to $3.5 billion compared with $3.8 billion in the first half of 2013. Brazil, however, experienced a significant increase, with $2.2 billion raised in the first half compared with $1.3 billion in the period a year earlier. That was not a surprise.
DealBook reported last month that private equity fund-raising in Brazil this year had already surpassed the $2.4 billion raised all of last year, based on the association’s data. Several large firms that last raised funds in 2010 and 2011 are back on the market.
The Carlyle Group, Gávea Investments and Pátria Investments, backed by the Blackstone Group, have already secured new capital this year.
The association’s chairman, Patrice Etlin, also forecast an increase. In a February interview with DealBook, Mr. Etlin said, “I believe we are going to begin to see fund-raising pick up again this year.”
Mr. Etlin, who is also a managing partner at the private equity firm Advent International, predicted at the time that “levels should be greater than they were in 2013, but not at as high as in 2010-11.”
In Mexico, fund-raising dropped to $212 million, compared with $879 million raised in the period a year earlier. That decrease was due in part to the closing of several large firms’ funds last year. The same was true for the Andean region, which tallied $578 million, a drop from $763 million.
Still, new funds, albeit smaller, are expected to be raised there by the end of this year. “This is a dynamic period for private equity fund-raising” in the region, the association’s president and executive director, Cate Ambrose, said in a statement.
She added, “We expect year-end 2014 totals to likely reach $8 billion.”
That would not surpass the $10.3 billion high-water mark set in 2011, but it would be the largest amount since then and notably more than the $5.5 billion raised in 2013.
nytimes.com
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