Vinci and Compass merge to form $50bn AUM Latin America alternatives manager

March 8, 2024 (Preqin News) - Brazilian alternatives investment firm Vinci Partners is to merge with Latin America-focused Compass, creating a regional alternatives asset management firm with combined AUM of $50bn. 

The merger, which is expected to complete in the third quarter of this year, subject to regulatory approval, will allow Vinci to expand its geographical base to eight countries in the Latin America region, while opening up Vinci’s Brazilian client base to Compass.

Founded in New York in 1995, Compass provides advisory services to institutional investors, intermediaries, family offices, and HNWIs, and currently has over $37bn in AUM and advisory. It has offices in seven LatAm countries, as well as the US and UK. Vinci Partners specializes in private equity, real estate, private credit, infrastructure, and hedge funds among other asset classes.

Alternative assets have been growing in popularity in the region in recent years. Between 2016 and 2023, Latin America-based investors increased their combined allocations to alternative assets from just over $78.6bn to more than $100bn, equal to growth of 4.2% per year, according to Preqin data. Private equity remains the largest exposure, but private debt, hedge funds, and natural resources allocations show the strongest growth.

'There is a significant opportunity to grow in LatAm, and the combination with Vinci will allow us to develop new regional products leveraging on their extensive capabilities as well as expand our product base into Brazil through Vinci´s distribution relationships,’ said Jaime Martí, partner and Chief Executive Officer of Compass.

Once the merger is complete, Manuel Balbontín, Co-Founder and Chairman of Compass, and Jaime de la Barra, Co-Founder and Vice Chairman of Compass, will join Vinci’s Board of Directors.

Vinci is currently in the process of raising Vinci Capital Partners IV and Vinci Climate Change FIP Multiestratégia. The former is a private equity fund with a target size of $400m, while the latter is a private equity fund focused on buyouts, aiming to raise a total of $1bn, with a core focus on energy and utilities.

According to Preqin Insights’ fundraising guide for Latin America, allocations have increased most in private equity and private debt, the latter of which grew threefold in 2021. Real estate, infrastructure, and natural resources have yet to fully recover.

Latin America currently hosts 6% of the world’s GDP but accounts for just 1% of the global alternatives market, but there are catalysts that could ameliorate this divide; notably, the easing of restrictive regulations that limit how much can be allocated to alternatives. Among Latin American countries, Brazil’s regulatory regime is the strictest, particularly when it comes to investing pension funds in international companies.

_{The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accept no liability for any decisions taken in relation to the above.}