LatAm PE Investment Breaks Record

PE investment in LatAm reached a record $8.1bn in 2010, according to a report by LAVCA, a 122% increase over the year before. That compares to a 7% decline in US fundraising and a 32% decline in European fundraising, according to LAVCA. Southern Cross Group and Advent International closed the two largest LatAm funds at $1.68bn and $1.65bn, the association said. “We are seeing unprecedented interest from global investors looking to diversify their portfolio,” said Cate Ambrose, president and executive director of LAVCA. Brazil continues to dominate investment, capturing 76% of invested capital. “While newcomers are focused on Brazil, veterans of the region are targeting investments in other major markets where there is less competition, such as Mexico, Colombia, Peru and Argentina,” Ambrose said. “We also see some Brazilian firms positioning themselves as regional players instead of Brazil-only investors by expanding into other Latin American markets.” Both Chile and Colombia saw a significant increase in the number of deals and amount of capital committed to companies in each country. While growth financing and buyouts captured the largest share of deal capital (39% and 37% respectively), the amount of capital directed towards early stage investments grew by 54%, with the average deal size increasing at a healthy pace, from $1m in 2009 to $1.6m in 2010.