Private equity was one of those forms of capital – along with bonds, foreign direct investment and public equity – that replaced the flow of bank loans to Latin America in the 1970s and 1980s. When the Internet age dawned on Latin America in the late 1990s, Susan Segal was among the first investors to see the light. Indeed, the name Segal became synonymous with Latin American Internet deals.
As a partner at the private equity divisions at Chase Manhattan and later JP Morgan, Segal was an early and enthusiastic supporter of start-ups such as StarMedia, Patagon.com and Mercadolibre. In October 1999, StarMedia raised $204 million in the first initial public offering by a Latin American Internet start-up, just before the Nasdaq sank like a rock.
Segal quit JP Morgan in 2003 to establish her own consulting firm. She still believes in the value of well-managed Internet businesses and thinks they and other start-ups are critical to future economic growth in Latin America. Entrepreneurship must be encouraged. “A great piece of what I did was to convince young entrepreneurs in the region to reach for the moon and the stars, and get there,” she says.
Segal has done deals in just about every imaginable sector. She and JP Morgan Partners were behind a $275 million private equity investment in Corpbanca, the Chilean bank that is controlled by Alvaro Saieh, JP Morgan and Hicks, Muse, Tate & Furst. “It was a cutting-edge deal,” says Segal of the 1997 transaction. “No one had ever raised that kind of money before.” Last year, Corpbanca became the first Chilean company to launch an initial public offering in five years, raising $150 million in the local market.
Segal thinks investment bankers have lost sight of their role as long term strategic advisors whose advice doesn’t have to be accompanied by a deal. “It’s not about transactions,” says Segal. “It’s about building relationships, working with them overtime and taking a holistic approach.”