South America-Focused Private Equity Fundraising – February 2015

by Allison Polchinski

  • 20 Feb 2015
  • PE

Preqin’s Funds in Market online service is currently tracking 73 funds on the road which are focused exclusively on investments in South America. This was a strong start to the year for South America-focused vehicles, considering that just 21 South America-focused funds raised $7.7bn in 2014, and 29 funds raised $6.2bn in 2013. 

Buyout vehicles were the most prominent fund type of South America-focused funds in 2014, with this strategy raising 60% of total capital. Buyout vehicles also had the largest average fund size ($1.1bn) in 2014, with the two largest South America-focused funds raised during the year utilizing a buyout strategy. The largest fund of 2014 with a focus on this region was Advent Latin American Fund VI, a $2.1bn buyout fund raised by Advent International, which focuses on control buyouts and expansion financings within the Latin America region. 

Real estate and balanced strategy funds were the second and third largest fund type by proportion of capital raised in 2014, raising 15% and 14% respectively. GLP Brazil Income Partners II was the largest South America-focused real estate fund that reached a final close in 2014, raising $976mn. Gávea Investimentos managed the largest balanced-strategy fund for 2014, Gávea Investment Fund V, which focuses on investments in Brazil across a diverse range of industries. Interestingly, infrastructure funds, which raised the largest proportion of capital for South America-focused funds in 2013 (36%), were responsible for only 1% of the capital raised in 2014. Additionally, vehicles with a balanced strategy, which contributed a negligible proportion of capital in 2013, raised 14% of total capital for South America-focused funds in 2014.

South America-focused fundraising has increased in prominence over the last year; $1.5bn more capital was raised in 2014 than in 2013, with the average fund size increasing from $247mn to $405mn. Additionally, there are several large South America-focused vehicles currently in market, the largest of which is P2Brasil III, an infrastructure fund managed by P2Brasil. The fund is targeting investments in the energy, distribution/storage, natural resources, logistics, transportation, waste management and water sectors. With 73 funds in market this early in the year, targeting over $17bn and focused exclusively on South America, 2015 looks set to be a strong year of fundraising for the region.

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