Despite the encouraging growing prominence of other countries in Latin America, data shows that Brazil clearly remains private equity’s sweet spot in the region. Preqin’s Funds in Market reveals that there are currently 79 private equity funds on the road solely focused on Latin America, seeking to raise an aggregate total of $20bn. Of these funds, the greatest proportion (37%) focus exclusively on investing in Brazil, increasing to 56% when including funds that focus on the country as part of a broader focus within Latin America.
Analysis by fund type shows that infrastructure funds account for the highest proportion of the capital being sought. The 12 funds collectively aim to raise just over $5bn in total capital commitments, making up a quarter of the aggregate targeted capital. This is followed by buyout funds, with 10 funds seeking aggregate commitments of just under $5bn. Real estate funds are the most common fund type, with 14 funds contributing to 17% of the total amount of capital being sought.
Currently, 65% of the funds in market are managed by GPs located within Latin America, with 51 funds having Latin America-based fund managers. Of these funds, 30 are managed by GPs located in Brazil, nine in Mexico and the remainder are spread across Argentina, Chile, Columbia, and Peru. Of the managers based outside of Latin America, the highest proportion is among GPs based in the US; collectively these managers are looking to raise a total just shy of $5bn through 17 funds focused on Latin America.
The largest exclusively Latin America-focused vehicle, P2Brasil III, is seeking to raise $1.6bn in capital commitments. The infrastructure fund, managed by P2Brasil, is a joint venture established by Brazilian fund manager Pátria Investimentos and Brazilian engineering company Promon. So far the fund has reached a first close of $164mn in capital commitments.
BTG Pactual Brazil Investment II, which seeks to acquire $1.5bn, is the second largest vehicle to focus exclusively on investment opportunities in Latin America. The fund makes buyout investments in companies that operate in a diversified range of non-financial sectors across Brazil. The largest fund managed by a GP based outside of the Latin American region, LAC-China Infrastructure Fund, aims to collect a total of $1bn. The infrastructure fund, managed by London-based Macquarie Infrastructure and Real Assets (MIRA), is primarily focused on developmental infrastructure within Latin America and the Caribbean.
Of the 79 funds currently in market, 34 funds have already managed to hold at least one interim close, collecting an aggregate of $7bn to date.