Private equity, venture capital fundraising up in Latin America

Data released recently by the Latin American Private Equity & Venture Capital Association (LAVCA) indicated an increase in Latin American private equity and venture capital fundraising, investment and exits this year. 

Fundraising increased 21 percent with firms raising an aggregate $4.27 billion, according to the LAVCA report. 

Investments were up 39 percent with $3.58 billion being deployed, and exits generated $1.74 billion in proceeds, an 8 percent increase compared to 2014.

“Concerns over the slowdown in growth or the need for ongoing structural reforms appear to be outweighed by the opportunity to invest dollars in funds that will make investments in heavily depreciated local currencies,” Cate Ambrose, president and executive director of LAVCA, said. “(Private equity/venture capital) firms active in Latin America are putting money to work in new and follow-on deals, particularly in Brazil where an environment of adversity is creating new opportunities for investors.”

The first half of 2015 was the strongest first semester for fundraising since 2011 when $4.9 billion was raised.

Investments in energy, oil and gas and logistics in Brazil and Mexico dominated among large-cap transactions (ticket sizes of more than $100 million). Health care was the top sector for investment overall with $810 million deployed, and the most dynamic sector was IT with 62 transactions, an increase of 44 percent over last year.

Venture capital and early stage activity continued to gain momentum in the first half of 2015. The region deployed $264 million through 71 deals compared to the $173 million invested in 47 transactions during the first semester of 2014.

Brazil is the most mature venture market in the region, and managers there deployed 81 percent of the total investment dollars.

Mexico and Argentina saw increased early stage investments compared to the same period in 2014.

For more information, visit www.lavca.org.