August’s edition of Private Equity Spotlight examines how domestic fund managers in Latin America are dominating the fundraising market so far this year. The analysis also shows how fundraising figures have been disappointing for 2015 YTD, where just $4.2bn has been raised from 14 vehicles, a long way off the peak seen in 2011. This blog will look at the composition of private equity fund managers headquartered across Latin America and the Caribbean.
There are 244 private equity fund managers based in Latin America & the Caribbean according to Preqin’s Fund Manager Profiles online service. These firms have raised $37bn in aggregate capital commitments over the last decade, with Brazil-based firms dominating the market. Fifty-eight percent of aggregate capital raised in the last 10 years was collected by private equity firms based in Brazil. Despite stagnant economic growth and accusations of corruption over the last couple of years, Brazil has raised the two largest Latin America-focused funds so far this year. Furthermore, in 2014, Brazil-based firms manage four of the five largest funds raised by domestic fund managers.
It is no surprise, therefore, to see that the firm that has accumulated the largest amount of capital over the last 10 years is based in Brazil, as shown in the table above. Gávea Investimentos, an asset management company founded in 2003 by Arminio Fraga Neto, the former president of Brazil's Central Bank, has raised nearly $5bn in aggregate capital commitments in the last decade, with $1.3bn in estimated dry powder available to invest. The firm is the private equity and hedge fund arm of JPMorgan Chase & Co., but is expected to be sold off by the investment bank before the end of the year.
Of total Latin America & Caribbean-focused fundraising, South America-based private equity firms have raised 83% of aggregate capital over the last 10 years, followed by those located in Central America (12%) and the Caribbean (5%). Inventages Venture Capital, based in the Bahamas, and Nexxus Capital, based in Mexico, have both raised the largest amount of capital in their respective regions, each collecting $1.2bn.
In terms of dry powder, Patria Investimentos have by far the most available to invest, with an estimated $2.3bn. This is largely owing to the $1.8bn Pátria Brazilian Private Equity Fund V raised last year, the second largest Latin America & Caribbean focused-fund ever raised. For more information on Latin America & Caribbean-focused private equity fundraising, including fundraising momentum, historical fundraising figures and the largest funds ever closed, please see the latest edition of Private Equity Spotlight.