Brazilian Exit Multiples Seen Tightening

Exit multiples for private equity plays in Brazil are likely to fall further this year, but in Mexico they should rise, said industry officials Thursday at a Mexican private equity conference organized in New York by the United States-Mexico Chamber of Commerce. Brazil is an overheated market for the asset class, they say. “There is still a large differential between high exit multiples in Brazil and those in Mexico. But already Brazil multiples are down this year,” says Luis Alberto Harvey of Nexxus Capital.” Investors point to Brazil’s weaker real and the fact that the Ibovespa index is down 2.12% from a year ago as reasons for the decline in multiples, compared to Mexico’s Bolsa which has remained relatively flat over the last year.