Performance of Central and South American Focused Private Equity Funds

by Gary Broughton

  • 16 Sep 2011
  • PE

Emerging markets are often an attractive prospect for fund managers and investors alike due to the opportunity for investment into largely untapped markets and the potential for high returns. At Preqin, we hold net to LP fund level performance data for 157 private equity funds focussing on Central and South America enabling us to examine the performance of the Central and South American private equity industry.

By using our custom benchmark module we are able to generate median net IRRs and quartile boundaries for funds which focus on investments in Central and South America with vintage years between 2005 and 2008. These figures show that the median net IRR remains positive for all vintage years with the exception of 2006, which is currently showing a median net IRR of -1.3%; however the median net IRR ranges between 11.5% and 22.0% for the other vintage years within the sample. Vintage 2007 funds are currently showing the highest median net IRR - 22.0%. Vintage 2005 funds currently have the highest top quartile boundary of 41.0%, with vintage 2007 and 2008 funds showing top quartile boundaries of 31.8% and 27.5% respectively. The bottom quartile boundaries remain positive for all vintage years, falling into the red only for vintage 2006 funds. For vintage 2008 funds, the top and bottom quartile boundaries range from 11.0% to 27.5%, suggesting that private equity funds investing in Central and South America can potentially produce very favourable returns.

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