Conduit Spots LatAm Bargains

Regional infrastructure-focused private equity fund Conduit Capital detects significant opportunity in LatAm power generation and pipeline assets amid repricing related to the global crisis. “We are seeing the best value in 15 years,” Conduit chairman and managing partner J. Scott Swensen tells LatinFinance. He refers specifically to LatAm energy infrastructure, but the fund is also considering diversification into other sectors. The investor is steering clear of Paraguay, Venezuela, Ecuador, Argentina, Bolivia and Nicaragua, but he likes assets in the rest of LatAm, where there is stability. According to Swenson, there are strategic buyers – especially non-LatAm companies, including Canadian – interested in acquiring developed energy assets in LatAm. Sellers are mostly firms that have encountered problems with financing, he adds. Despite his outlook for continued M&A flow, Swenson does not expect any multibillion dollar deals in 2009. So far, he says, Conduit’s Latin Power III fund is 57% invested and another 18% is allocated. Total capital raised for that fund was $393m. “We will use up our capital in 2009,” Swenson adds. Future funds that Conduit may set up will likely invest in non-energy infrastructure projects like toll roads, tunnels and airports. Swenson adds that more opportunity will arise as most countries have turned such projects over to the private sector. Conduit last week completed the sale of the Libramiento natural gas compression plant and pipeline in Mexico to Canada’s InterGen for $89.2m. The shop says it will earn about twice what it invested in Libramiento with the sale. In October, Conduit invested more than $50m in a 50% stake in Brazil’s GLEP, a developer of hydropower projects.