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CO NT EN TS 20-35

Wealth Manager Spotlight Interviews with UBS Wealth Management, Abbot Downing, Morgan Stanley Private Wealth, and more.

Latin America’s Largest Pension Fund CIO talks doubling PE investments Interview with Rene Sanda, PREVI

Frontier Markets and Venture Capital in Latin America

6 12

Interviews with FMO, DEG, IFC and BNDES

14-19 8

PE and Particle Accelerators

Interview with Pierre Sauvagnat, Banque Cantonale de Geneve

Security and Social Cohesion

Interview with Álvaro Uribe, Former President of Colombia



From Oman to Latin America

Interview with Fabio Scacciavillani, Oman Investment Fund

*click photo to jump to interview


How EIG purchased Batista’s LLX Interview with Kevin Corrigan & Derek Lemke von-Ammon, EIG Global Energy Partners

Why Auto Group Brazil is looking to the Andean Interview with Marshall Cogan, Auto Group Brazil

40 The Inflow of Intellectual Capital to Colombia 38

Interview with Philip Fitzgerald, Jamestown Latin America

Where are Mexican reforms leading to PE opportunities? 46

Interview with Steven Costabile, PineBridge Investments

Following up with Siguler Guff Interview with Cesar Collier, Siguler Guff

Follow-up with The Helmsley Charitable Trust 56


Interview with Bei Saville, Helmsley Charitable Trust


EDITOR’S NOTE Chief Executive Officer Adam Raleigh

The Shifting Sands of PE International capital flows in, the local economy heats up, prices rise, the macro picture de-stabilizes, and capital leaves the country in a wake of dust. Some call it the boom-bust cyle, but in my interview on page 20 with Jorge Mariscal, CIO for Emerging Markets at UBS Wealth Management, he describes this phenomenon another way: “An analogy I like to imagine is an elephant in a bathtub full of water. When the elephant goes into the water, the water goes over the edge, and when the elephant gets out, the water goes all the way to the bottom. The elephant is global capital and emerging markets are the water in that bathtub.” So what are Latin American countries doing right to avoid this scenario which has taken place in many emerging markets? How is it different this time around? In the 2014 Q1 edition of LPEJ, you’ll find our feature set of interviews with both international and domestic wealth managers active in Latin America. Even as negative headlines of emerging markets have persisted, you’ll read why improving valuations in Brazil and the economic story in the Andean region are leading more and more HNWIs to invest in the Latin American private equity story. In addition to our Wealth Manager Spotlight, we have interviews with Rene Sanda, CIO at PREVI, Latin America’s largest pension fund, the Former President of Colombia, Álvaro Uribe, and our follow-up interviews with Siguler Guff and the Helmsley Charitable Trust, among others. Since our maiden issue last quarter, we have launched! On the site you can read all of our interviews to date and request more information about Latin Markets’ upcoming private equity meetings, including a new event dedicated to the Andean region. As always, I’d like to thank those that took the time to join me for an interview! Stay tuned for our next issue, which will feature interviews with the top fund managers in Latin America, just as the World Cup is in full swing. All the best,

Management Giseli Akaboci Kenneth Bauco Kilby Browne Charles Fathers William Frank Paloma Lima Zaianna Ortiz Amir Ouki Tim Raleigh Ahmad Sahar Finance & Operations Larissa Guimaraes Editorial Seth Fraser Keoni Harrison Karishna Perez Private Equity Group Anna Gonzalez Liana Grieg Brandon Link Real Estate Group Daniel Kim Pablo Oliveira Andres Ortiz Maria Rodriguez Roy Salsinha Energy & Infrastructure Projects Group Javier Grullon Carolina Gomez-Lacazette Daniel Para Mata Ana Carolina Romero Virginia Schmithalter Javier Vergara Hedge Funds Group Ana Lobo Ana Mello Jack Schwarten Mauricio Silva Institutional Investors Group Carolina Barreto Hugo Della Motta Marcela Fonseca Jose Pulgar Cinthia Silva Private Wealth Group Heriberto Acevedo Maria Tatis John Zajas

The Latin Private Equity Journal (LPEJ) is a Latin Markets weekly newsletter and quarterly publication featuring interviews with LPs, GPs, government officials and private equity thought leaders active in Latin America. Latin Markets is the world’s leading provider of Latin America focused investment forums, regional summits, and streamlined market intelligence. Our platform provides a comprehensive and fascinating perspective of the opportunities in this diverse and booming region. © All LPEJ content is copywritten & owned solely by Latin Markets Brazil LLC.

Seth Fraser Editor at The Latin Private Equity Journal

To advertise in LPEJ, contact: For private equity forum opportunities, contact: Latin Markets, 10 W 37th Street 7th flr. New York, NY 10018



Latin America’s Largest Pension Fund CIO

Talks Doubling PE Investments


Rene Sanda

Chief Invesment Officer


1. Please give us a brief background on PREVI.

RS: Founded in 1904, PREVI is the

largest pension fund in Latin America. Its participants are mainly employees of Banco do Brasil. PREVI has two plans: Plan One, a defined benefit plan, with 118,072 participants, and Plan Previ Futuro, a defined contribution plan, with 79,825 participants (as of July 2013). PREVI resources come, at first, from contributions of Banco do Brasil (sponsor) and its employees. These resources are allocated in company shares, real estate properties, bonds and other investments, to ensure the payment of benefits. As of July 2013, PREVI’s total assets were approximately 167 billion Reais (equivalent to $72.6 billion, considering the dollar at 2.30 Reais), or 163 billion Reais for Plan 1 and 4 billion Reais for the PREVI Futuro Plan. In private equity, PREVI has committed 1.9 billion Reais and paid-in 1.1 billion Reais in 25 funds.

2. What kind of private equity

strategies do you prefer? What is your diversification strategy across asset classes and sector?

RS: PREVI already has a diversified

portfolio in private equity funds, all of them established in Brazil. The largest allocations are in oil & gas, infrastructure and agribusiness. Our strategy today is to look for sectors that, in addition to offering consistent returns, are complementary to our variable income portfolio. Some of

these sectors would be infrastructure, retail/ consumer and health care, among others.

3. It has been reported that you will

double investments in private equity over the next three years. Which sectors and themes will you be focusing on with these allocations?

RS: These new investments will continue

to follow the strategy of diversification to complement our portfolio, with adequate returns. PREVI has developed its own methodologies for fund selection and

through seminars, workshops and meetings to prepare different departments. We must focus on equities, with global exposure (mainly in the US and Europe), and private equities in sectors that have a low or negative correlation to the equity portfolio of PREVI.

6. What is the typical size of

commitment you make to a fund?

RS: We don´t have specific rules for the

size of an investment, but we are evolving into larger funds, given the availability of

“As the private equity market grows in Brazil, this increases the number of players, thus providing broader choices in the selection of managers.” manager evaluation. These tools will continue to guide our future investment decisions. As the private equity market grows in Brazil, this increases the number of players, thus providing broader choices in the selection of managers.

4. What are the advantages of

resources that PREVI has to invest. We recall that, in accordance with Brazilian regulations, PREVI can only have up to 25 percent of the capital of a private equity fund.

7. What kind of returns do you expect to see on your investments?

investing without an investment committee?

RS: The returns of all PREVI investments

RS: First, to speed up the investment

process, giving more autonomy to managers in their decisions. We also understand that by adopting this mode, the procedures of funds established in Brazil will get closer to those which are abroad, thereby encouraging the presence of foreign managers and investors in the Brazilian market.

5. You recently set up your first

must exceed at least our actuarial goal, which is today at IPCA plus 5 percent per year. However, given the risks of investing in private equity, it is reasonable to expect higher returns.

8. Why are Latin Markets’ events valuable for investors to attend?

RS: All events that allow a better

vehicle to invest in large foreign firms. Why is it important for Brazilian pension funds to begin investing overseas?

understanding of the private equity market, its funds and their managers, and contribute to a greater degree of governance in these funds, are valuable for investors, especially in a growing market like Brazil.

RS: It is important to start investing abroad

Mr. Sanda spoke on the panel, “Brazilian Chief

because of the possibility of access to a large amount of assets and investment products. The goal is diversification of investments. The educational process has been done

Investment Officer Roundtable” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.




Banque Cantonale de Geneve

2. How much exposure do you currently have to emerging markets?

time as we’d like to. We will hopefully begin making allocations this year.

PS: We have a first fund that is closing next

6. What is your outlook for emerging

year. In emerging markets, we will typically include 5 to 10 percent exposure. We search for higher returns in emerging countries because of political risk and currency.

Banque Cantonale de Geneve.

PS: Banque Cantonale is owned mainly by

the state and the cities around Geneva. 80 percent is in public hands and 20 percent is held by private investors. BCGE is quoted on the Swiss Stock exchange and rated A+. Before BCGE, I worked on the Investment Committee of the CERN pension fund in Switzerland. As head of the trading room and asset liability management at BCGE, I am now setting up a fund of fund for the bank in private equity that we have been working on for the last five years. I’m setting up a fund of fund for the bank in private equity that we have been working on for the last five years. It has a global investment mandate and is being held in the bank’s balance sheet with a focus on buyout, growth and midmarket private equity strategies.


PS: The risk cycle of economic activity

PS: Our experience is little thus far. We want

internationally is higher than emerging markets where growth stays strong. Emerging markets tend to have younger populations and a higher growth locally which would corroborate the investment theme on consumer consumption. The regulations of the country, taxation, political stability and an exit strategy are very important. I guide myself from my previous experience. As an investor, I like the idea of having exposure to emerging markets.

4. Are there certain countries you

Additionally, private equity cycles are not the same as the equity cycles. We don’t do hedge funds. Private equity is a huge value-added. It’s the best investment choice at the moment.

3. What has been the firm’s experience investing in Latin America to date?

1. Give us a brief background on

markets as a whole?

a worldwide exposure where there is the best return for our customers and the bank. Personally, I have been involved in Latin America for a number of years. We chose Latin America because we think it offers great investment opportunities.

are focused on in Latin America? What dynamics and themes are you interested in?

PS: We’re focusing on Brazil, Mexico and

Colombia in particular. We are researching investments for a pan-regional approach with a focus on diversification and the consumer and health care sectors primarily.

5. What has been the due diligence process for you in the region?

PS: We haven’t been able to allocate as much


7. What advantages do you find

attending our Private Equity Forums?

PS: The event in São Paulo was my first Latin Markets event. I would like to see how the governing bodies treat investors and understand how they view private equity as a creator of jobs and a way to improve the competitiveness of a country. Governments need to understand the needs of international investors such as economic, political and monetary stability, as well as steady financial regulations.

LPEJ Q1 2014: Fundaçao Copel

Brazilian Forestry PE Investments Bruno Maueler da Cruz Financial Office Adivsor, Fundaçao Copel

1. Give us some background on your role at Fundaçao Copel.

BC: I’m the Financial Office Advisor and

Investment Committee member for Fundaçao Copel, a multi-sponsored pension fund, whose main sponsor is Copel, a state-owned electric utility company. We manage around $3 billion, and we invest through fixed income, equities, private equity, real estate and loans to participants.

2. How much of your portfolio is in private equity?

BC: We have two plans. One is a defined

benefit – DB – (approximately $2 billion) and the other one is a variable contribution plan – VC – ($1 billion). In case of the VC, there is a combination that mixes characteristics of defined contribution in the resource accumulation phase and defined benefit in the benefit payment phase. The DB plan has a target of 2 percent in private equity. The other (VC) is 4.5 percent. We currently have a small portion invested in private equity, however we do have around 1.3 percent of the DB plan and 2.2 percent of the VC plan in committed capital.

3. What type of managers did you select for your private equity investments?

BC: We are starting to build our private equity

program, so we are investing very selectively, and being careful about the vintages. Currently, we have investments in consumption and infrastructure, through private equity funds. A smaller part of the committed capital is in real assets, through a timberland fund. Selecting top managers in private markets is vital. Our investments are made with an eye toward long-term relationships, so for that, we select managers with high ethical behavior and professional standards. We like experienced managers, which have completed the investment cycle more than once, in different economic scenarios. We also like to partner with firms that pursue a value-added approach to investing. The Brazilian PE industry is younger than the industries of developed countries, so we have a lack of managers with a long list of divested funds, but on the other hand, it is growing fast and new managers are appearing.

4. Why did you select forestry and

5. What advantages does private equity play for Brazilian pension funds? How do you see this increasing?

BC: Private equity brings extremely attractive

long-term risk-adjusted returns, if you have the right partners. As the interest rates get lower in our country, over the long-term, I believe that private equity allocation should raise considerably in our industry.

6. What are your thoughts on Brazilian pension funds investing overseas?

BC: I think it’s a natural and important

process. That is a new investment theme for Brazilian pension funds, so for that, we are educating ourselves by participating in discussions and forums.

7. What advantages do you find attending Latin Markets events?

BC: It’s very interesting and valuable to attend


BC: The investment came to us and it looked

like a good opportunity. Brazil has a natural advantage when it comes to forestry. Trees grow faster here than in other countries. North American and Canadian pension funds are also investing in this asset class. It seems stable and profitable and brings diversification.

your events. I appreciate the invitation. I attended in 2012 and I came back because I knew it was a good opportunity to exchange experiences with other institutional investors and gain broad knowledge of the market. I expect to be here in 2014 as well.



LPEJ Q1 2014: Oman Investment Fund

FROM OMAN TO LATIN AMERICA Fabio Scacciavillani Chief Economist, Oman Investment Fund

1. Give us a brief background on your role at the Oman Investment Fund.

FS: Oman Investment Fund is a sovereign wealth fund that was created in 2006. Its main task is to transfer wealth from hydrocarbons to next generations. It’s not the only state-owned asset manager in Oman. There is another institution called the State General Reserve Fund which was started as a rainy day fund that would accumulate funds when oil prices were higher than expected.

We are sector agnostic and have a broad mandate. We haven’t invested so much in Oman thus far, though now we are focusing more in Oman because it offers great opportunities in the current global scenario. The economy is extremely resilient to global shocks and has been growing at a steady pace.

2. How do you evaluate opportunities

in Latin America and emerging markets?

FS: Our exposure isn’t that great to Latin

America. It is a bit too far for us but we do have positions through a third party that are performing well. Since we are a future generation fund we tend to invest more in emerging countries because that’s where the growth rates are higher. When we look at geographical exposure we look more at factors related to institutional capital, or



in other words, countries that are well run, where the rule of law is enforced, investor rights are preserved, the legal system is efficient and demographic trends provide tailwinds.

3. You mentioned you have some

exposure to Latin America. Where are you currently invested in the region?

FS: We have exposure through a third party

— we haven’t done any direct investing. There are a wealth of opportunities in Latin America but you must keep in mind what you’re trying to achieve. You have a whole range of countries with diverse challenges and opportunities, from Argentina to Costa Rica. If you want to explore the middle class expansion theme, or somewhere the finance system is well developed, you might want to look at Brazil. If you’re looking at the next big thing, natural resources or food security – then you might want to look at Paraguay and find a stunning diamond in the dirt. But as I said, you need the right human capital and expertise to pursue this. Peru, for example, is a great country. The macro picture has been quite positive. Chile is a safe bet with one of the best fiscal frameworks in the world. It is a good country to gain exposure to emerging markets without the usual risks of political instability or sudden implosion of governance.

4. Did you take a pan-regional or country specific approach to your investment in Latin America?

FS: We prefer a country-specific approach in general because circumstance and opportunities in different locations vary to a considerable degree. We analyze at the highest possible resolution all the specific elements, from macro policies to investor climate, before making an investment decision.

5. What advantages does private

equity play in your portfolio and in Latin America?

FS: I get wary when private equity is

described as an asset class because it’s more of a tool. You invest in companies that are not listed or you take strategic stakes in listed companies. The peculiarity in private equity lies in the type of strategy you pursue. You could invest in a turnaround strategy, in companies that need liquidity or companies that operate in sectors with high growth. Each one of these segments requires specialized human capital. We think of private equity as a whole range of strategies – each one of them with their peculiarities, rules and appeal. It is vital to align the talent and human capital within your fund with the objective and strategies you pursue. This is what we like to see in our partners when we invest.

LPEJ Q1 2014: Oman Investment Fund

“If you’re looking at the next big thing, natural resources or food security – then you might want to look at Paraguay and find a stunning diamond in the dirt.”

6. What has been the educational

process in Latin America when traveling from a country such as Oman?

FS: The geographic breakdown can be

misleading. Our approach is based on growth factors. We ask, what are the longterm drivers of growth? Demographics, natural resources, commodities, middle class gentrification, infrastructure, technology, medical advances and trade integration. Latin America for example still has a long way to become economically integrated like Europe. If you focus on demographics, maybe Chile isn’t the right place to invest. If you look at the dividend of economic liberalization, Mexico could be rather appealing. Then again if you’re looking at natural resources you might think Venezuela is a great place, but this would mean ignoring political realities.

7. Are you looking to increase your allocation to Latin America?

approach, some countries come on our radar like Brazil, Chile, Peru and Paraguay have captured our attention. Mexico has been the darling of international investors but we haven’t done much homework there yet, though we should. An area where we think international investors have looked is in massive tourist projects. If you look at São Paulo, it’s very underserved as far as upscale hotels. I don’t know why the gap hasn’t closed faster. It is an area worth examining along the coasts not only in Brazil, but throughout Central America. There might be many Costa Ricas ready to take off.

Mr. Scacciavillani spoke on the panel, “Pension & Sovereign Wealth Investor Roundtable” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.

8. What advantages have you found attending Latin Markets’ events?

FS: I go to about 10 conferences every year

all over the world and I have to say I was really impressed by this event. The number and caliber of people is outstanding. The level of panels and speakers is also remarkable!

FS: It’s definitely an area that we keep

under observation. Within our growth



à lvaro Uribe President of Colombia from 2002 – 2010

LPEJ Q1 2014: Former President of Colombia, Álvaro Uribe

AU: It is still a great challenge for the

country. There have been some setbacks. The best way to fight back and contain these setbacks is our public opinion. Our public opinion is very committed to increased security. This is what I think. After the eight years of my administration, my countrymen are convinced that Colombia can be a safe country.

3. As President, how did you go about ensuring that Colombia would remain self-sufficient and secure in energy production?

AU: Our creation of the National

Security and Social Cohesion 1. When speaking of Colombia’s

improvement as a destination for investors, many point to improved security. Under your administration, can you describe your strategy on narcoterrorism and why it was effective?

AU: During my eight years as president,

Colombia made significant improvements in security, investment and social cohesion. We are a country with democratic values and have respect for human rights. Any time there was a problem with human rights we did not hesitate to punish those responsible. At the same time, we provided every Colombian a clear picture as to our democratic values. Security is an important means to have more investment and social cohesion.

2. Do you still believe security is the greatest issue facing Colombia right now?

Hydrocarbons Agency, an independent agency, was very important for the future of Colombian investment. Colombia was

for public expenses for the country to keep a low unemployment rate.

5. Looking back on your presidency,

what have you learned and what would you like to improve upon moving forward?

AU: I have participated in politics all

my life. My intention was to be truthful to my country. During my two terms as president, Colombia has made significant improvements. Of course there were many necessary achievements we could not accomplish, and of course we made mistakes. At this moment in my life after having been president for two terms I want to serve my country. I want to do much better than in the past. And I want to fight

“ At this moment in my life after

having been president for two terms I want to serve my country.” going to lose self-sufficiency. We were going to produce less than 200,000 barrels per day and now the number is more than 1 million barrels per day. We need security and confidence so that the domestic and international community continues investing in different forms of energy.

4. How crucial have strategic

for my country to avoid the bad example of Castro-Chavismo that is a very bad trend for Latin America. Former President Uribe gave the Keynote Presentation, “Leadership, Transformation and International Affairs in Colombia & Latin America” at the 3rd Annual Colombian Investors

relationships been with other countries for Colombia’s development?

Forum on February 5-6, 2014.

AU: Colombia is a country of over 40

million people. In order for the economy to grow faster and be integrated with all the countries in the world, we have trade agreements with the United States, Mexico, Chile, Central American countries, Canada and Asia. These trade agreements have been very important for our country. Now we need to speed up the domestic agenda for our country to become more competitive. We need infrastructure for railroads, ports, and to improve the navigation of our rivers. The domestic agenda must be accelerated in order for our people to gain more income. We need increased security and a strategy



LPEJ Q1 2014: IFC

Due Diligence in Haiti and Climate Change Investing in Latin America Ralph Keitel Lead of PE and Investment Funds for Latin America, IFC

1. Give us a brief background on your role at the IFC.

RK: I joined IFC eight years ago and am now

Head of the Private Equity Funds team in Latin America. IFC invests most of its capital directly but the funds group is set up as the limited partner for PE funds, investing between $400 million and $500 million each year. It is headed by a global industry manager in Washington, DC and each one of our five emerging market regions are led by a senior professional based in the field. Previously, I was lead for Eastern Europe and then relocated to Johannesburg to build the private equity funds team in Africa.

2. When did IFC first begin investing in Latin America?

RK: IFC started investing in PE funds in Latin

America in the 1980s. In the year 2000, we created a dedicated private equity funds group that has since invested roughly $3 billion in over 200 funds around the world. Our committed portfolio in Latin America is about $500 million currently.

3. Do you typically invest in regional or country-specific funds?

RK: We continue to do both. Private equity

in emerging markets has evolved in the past 10 years. In most markets, Latin America and Africa in particular, you tend to start investing in regional funds given the narrow deal flow and unproven model. As more capital flows into those markets and economies start to grow more rapidly, deal flow increases. At some point, you’re seeing enough activity to provide single-country managers, often domestic groups, with sufficient deal flow. In


Latin America, the Andean region provides an excellent example of this: the first generation of our PE funds had a regional strategy there. Now the markets are large enough to warrant Colombia or Peru-only funds. IFC is comfortable backing generalist funds in these markets. For sector-specific funds though, we still prefer they have a broader, regional focus.

currently have over $6 billion in assets under management across six PE funds and recently raised nearly $400 million for their first fund of fund which is dedicated to climate change. One of these climate change funds we recently invested in was a renewable energy fund called REAL LRIF which focuses on Central America.

opportunities in the region in light of your mandates?

investments in smaller frontier countries?

4. How does IFC go about evaluating

RK: As you know, IFC is the private sector

arm of the World Bank so we work exclusively through the private sector, seeking to balance developmental goals with financial returns, often by taking a portfolio approach. But developmental impact and financial returns usually go hand in hand, i.e., our most successful funds also create the most jobs. In line with our mandate we focus particularly on frontier markets and regions by supporting the private equity industry in countries and sectors that don’t (yet) receive a high level of commercial capital. Funds are also used to complement IFC’s direct investment activities. So while we invest in all sectors in Latin America, we pay particular attention to sectors such as health care, infrastructure or agribusiness that pose a bottleneck to development and require more capital. One of the major focus areas for us is currently the climate change space.

5. Where have you invested thus far with your climate change program?

RK: IFC has three main business lines. There is

the investment side, advisory services and then the third leg which is the asset management arm which was created five years ago and raises capital from third party institutions. They


6. How have you approached

RK: While we are committed to investing in

frontier markets, the larger markets in Latin America – Brazil, Mexico and Colombia – still constitute some of the largest exposures within IFC. But the difference is that when we invest in those more developed markets our approach is different from the largest limited partners in that, here too, we are backing smaller managers and niche sectors. In regards to smaller markets, in the last two years we’ve invested in two funds in Central America. One I mentioned above, a renewable energy fund, and the other is a dedicated generalist SME fund that invests in companies that pursue rollout strategies across Central America. In the Caribbean, which is also not high on the radar of most institutions, we’ve backed two funds in the past two years. The first is a dedicated small business fund in Haiti. The other is an investment, currently being finalized, in a dedicated private equity fund for the Caribbean.

7. What has been the due diligence

process especially in some of the smaller countries?

RK: This is a key challenge for investors.

It would be nice to arrive in some of those

LPEJ Q1 2014: IFC

smaller frontier countries and select from an existing pool of managers. The reality is that when we do invest, fund managers often have a limited track record and smaller teams, so you have to adapt your model to the local circumstances. For example, in Haiti there weren’t any domestic fund managers so we had to go and help to create such a fund manager. By providing initial capital, we act as an anchor investor and then go through an RFP process where we advise fund managers to apply and create

RK: Right now is a very interesting and

challenging time for emerging markets and Latin America. There are two major developments. First you have a possible slowdown in China’s growth which has global effects as a lot of the growth in emerging markets was driven by the rapid growth in China and the demand for commodities. In Latin America you have a number of countries that are highly dependent on exporting commodities. The World Bank published a report recently

“We focus particularly on frontier markets and

regions by supporting the private equity industry in countries and sectors that don’t (yet) receive a high level of commercial capital.” a dedicated Haiti fund. Then we select the manager and help them to go out and raise additional capital. We are able to do this because we have staff on the ground and know these markets very well. One of the benefits that IFC has is that we have nearly 100 offices around the world with boots on the ground and good local networks.

which predicts that, for the second year running, commodity prices are expected to decline. On the other hand you have the expectation of Fed tapering, which causes a lot of capital to move back to the US. This creates downward pressure on local currencies which may lead to higher interest rates, reduced lending and lower growth.

America moving forward as economic and political dynamics continue to evolve?

So the tide that has been lifting all boats in emerging markets over the past decade is unlikely to continue to the same degree. This means that private equity managers

8. What is your outlook for Latin

have to also adjust their return expectations as future returns will have to come from more than only revenue growth. So fund managers will have to work harder in the future to generate the same returns. But not all markets will be affected in the same way and IFC has already begun to adjust. In Brazil, for example, in the past several years we haven’t invested in any of the upper mid-market funds but our focus has been on small venture capital and impact funds. Right now, for example, we’re helping to create a fund that focuses on the Amazon region. In these markets, when some of the hot money leaves, it may still have an impact but not to the degree which some are saying especially in the more crowded places. Finally, private equity is a long-term asset class. While some LPs are clearly considering their allocations, the smart institutions will recognize that most Latin American countries are in much better shape now than in the 1990s and the risk of contagion is low. The less money available means fewer oversubscribed funds, and this might mean that pressure on pricing comes down in some markets.



LPEJ Q1 2014: FMO

Investing in first-time Managers in

Central America and the Andean Region

To develop new foundations in Latin America, Greg Lindae, Senior Investment Officer at the Netherlands Development Finance Company (FMO), spoke with me on how the firm’s mandates drive them to invest in newer, first time GPs in Central America and the Andean region.

1. Give us some background on FMO and your role at the firm.

GL: FMO is the Dutch Entrepreneurial

Development Bank, founded in 1970. It is one of Europe’s largest bilateral private sector development banks. It has invested over €6.3 billion into emerging markets. Latin American investments total approximately €1.4 billion.

Greg Lindae Senior Investment Officer Netherlands Development Finance Company (FMO)

FMO focuses on both debt and equity investing. The debt group provides a standard offering of credit products to clients. The equity group provides risk capital (private equity and mezzanine debt). Equity investments are primarily made in funds and co-investments. Our primary reason for PE fund investing is to provide anchor capital to newer fund managers and to gain access to co-investment opportunities. My role is as Senior Investment Officer in equity and mezzanine with a focus on co-investments and direct energy investments in the LAC region.

2. How do you go about evaluating

opportunities in Latin America given your mandates as a development bank?

GL: We have a somewhat more commercially

oriented impact mandate than some development banks. We are generally not an opportunistic tactical investor; rather we apply a more mandate driven portfolio strategy. This



is based largely on where our key stakeholders require us to gain exposure and have an economic impact. Due to our mandate in LAC, we do not invest currently in Brazil, Mexico and Chile, which we deem too developed for us to have a meaningful impact. As a development bank our desire is to be both additional and catalytic, while having a positive ESG impact. Being ‘additional’ means providing capital in a market where it is scarce. This clearly involves taking on risk return ratios that commercial investors are unwilling to take exposure to. Those who seek capital are unable to incur a cost of capital that reflects this risk, but as a development bank we are compelled to provide capital to meet our mandate. As capital markets begin to develop, ‘catalytic’ means providing capital and proof of concept in order to demonstrate to commercial investors that attractive opportunities exist. In order to be catalytic, without crowding out commercial investment capital, we need to charge competitive cost of capital rates. It is a balancing act when taking on risk as a provider of additionality while at the same time being sufficiently commercial to be catalytic. When we assess a fund opportunity we consider how our investment impacts individual funds and their portfolio companies, as well as the LAC equity capital markets by supporting the development of newer and smaller GPs. In the former case this means investing with more established large GPs with greater capital to deploy, and in the latter case this often implies supporting newer and smaller GPs, for example first-time fund managers. Currently in the LAC region we focus largely on Central America and the Andean region, but we also have legacy asset exposure to Brazil, Mexico

LPEJ Q1 2014: FMO

and Argentina. Our mandate requires us to have a certain minimum exposure to both the world’s 55 poorest countries and to low income and lower-middle income countries. Most countries in the LAC region are upper-middle income, with the exception of Central America.

3. What kind of private equity

investments have you provided in the Andean region, Central America and the Caribbean? What type of investment mandates are you focused on now across sectors in Latin America?

GL: As mentioned earlier we provide a

standard suite of credit market products for both corporate and project finance. Regarding equity, some of our PE fund investments are managed by ACON

interested in but have less experience. Energy efficiency is an attractive lever point to deal with supply and demand imbalances in the energy markets.

4. There can be significant risk

investing in countries where the managers and institutional capacity is not yet developed. Can you speak specifically to the due diligence in countries and funds where this was the case?

GL: This relates to our additionality

mandate. We aim to provide risk capital to companies so they can grow their business, increase head count and implement best practices in ESG. If it were possible, we would invest all of our capital directly but this is unrealistic so we depend on strong

economic downside risk, we will seek to minimize our exposure to it to the degree one can do so in PE. Regarding EM current account deficits and currency depreciation risk, one of the characteristics in PE, is that it is quite illiquid and hedging exotic currencies is expensive. Currency exposure definitely impacts our return economics. Although the CAD story for EM is not new news, it is at its highest level in five years. There is also a lot of discussion recently about the negative impact of the US Fed’s taper program. This reduction of cheap money flooding into EM is hitting their bond markets. The twin impacts of the taper and current account deficits are negatively impacting EM currencies. It is difficult to predict whether this will result in another ‘Tequila Effect’ crisis in Latin America. Perhaps a

“Emerging market cycles tend to be shorter and more extreme, but we are in the business of economic development — not running a global macro hedge fund.” Investments, Altra Investments, ACCION International, Abraaj Group, Advent International, DLJ Victoria Partners, Enfoca and Pampa Capital. Regarding sectors, FMO is open to all industries not listed on our exclusion list, with a special appetite for financial institutions; energy, especially renewable energy in Latin America; and agribusiness. We consider these sectors crucial for a country to guarantee long-term economic growth. Furthermore, we have gained a lot of experience in these sectors in emerging markets over the last 40 years. This is definitely the case in energy as we have project finance experience in hydro, wind and solar, as well as thermal, in all geographies both in debt and equity. We see a lot of opportunities in river-hydro and wind in the LAC region, with a focus on social considerations, e.g. how to foster a positive attitude in local communities toward a project, because a negative community attitude can derail it. Energy efficiency is also something we’re

relationships with local private equity expertise, managing funds with an on-theground presence. We have a fairly standard institutional due diligence process, which includes in part looking at fund governance, commercial terms, track record, with an eye towards separating luck from skill, etc. The key with any investing is the people with whom you invest in. Additionally, we have various levels of internal review to create a healthy level of dialogue in order to reduce deal team confirmation bias.

5. What are your thoughts on current

bigger story that could negatively impact the resource export driven economies in Latin America is the fact that China’s interbank lending market rates are spiking, which could be the beginning of a liquidity crisis spawned by a pile of bad debt. Regardless of these market fears, FMO invests in emerging and frontier markets for the long-term. How do you time the market if you have a 12 year hold period? There’s almost always going to be tail risk. Emerging market cycles tend to be shorter and more extreme, but we are in the business of economic development — not running a global macro hedge fund.

account deficits in certain emerging market countries and how this is influencing investor confidence?

GL: Our mandate is not to be tactical.

Furthermore, global macroeconomic prognostication is very difficult both in direction and timing. That said, if we perceive a country to pose significant



Wind, Hydro and Biomass Projects Interview with: Phillipp Hein, Investment Manager, DEG

1. Give us a brief background on your role at DEG.

PH: I was based in our head office in

Germany and now I’m moving to our São Paulo office to be closer to our clients. My job will be to strengthen the private equity business for DEG in the Mercosur region. What we’ve done in the past is to manage most of our private equity business from our head office and now we are partly decentralizing our PE business into regional equity hubs which are based in Singapore, Johannesburg, Nairobi, Mexico DF and São Paulo. DEG is sending equity people with a special focus to strengthen PE funds and direct equity investments. We invest in private equity funds and also undertake direct equity and mezzanine investments into companies. As a development finance institution we like direct investments given the direct impact in the companies we invest in, when it comes to environmental and social aspects and governance. With regard to fund investments, we try to achieve this impact through a strong alignment with the GP.

2. How have you selected managers to employ your mandates in lesser developed areas?

PH: When we look at the fund business and talk to GPs we attach importance to having the same mindset and a strong alignment on sustainability, environmental and social aspects, governance, transparency and developmental effects. We have seen a shift in the last years towards more awareness of these initiatives by most of the PE fund managers, because they now consider


these a part of solid risk management. For example, in high impact projects, if there are environmental, social or community issues, projects can get delayed or even stopped, having negative effects on financial returns. We are looking for managers who can manage these risks. Also, funds benefit from an investment by a DFI because it implies that these issues have been analyzed and addressed. We have a sustainability team in our head office in Cologne, Germany, that is very specialized in E&S topics and has a wide network of consultants. Our value-add to funds and companies is to bring best international ESG practice and standards. Many of the middle-market businesses are family run so we can help to make them more professional. Plus on the exit side this creates added value as you can sell to larger strategic investors, who require standards in place such as best corporate governance principles, reporting and E&S management. We have seen that these aspects have become more appreciated by fund managers over the past years.

3. What are your thoughts on emerging market fears with regard to account deficits in certain countries? How can private equity play an important role in emerging market countries?

PH: We have been investing in Latin America

for over 50 years and have experienced different cycles. We are long-term investors and believe in the long-term growth of the region. We have no pressure to sell in the short-term, so we can smooth out short-term fluctuations more easily. It’s actually more of an opportunity for us as we can invest counter cyclically and get better entry pricing. Here private equity can play a significant role in providing scarce counter cyclical funding to


companies. Also, allocating capital to the right companies and sectors, transferring know-how and lifting up standards and governance are other important points.

4. What type of mandates are you

focused on in Latin America in the coming years?

PH: We like the renewable energy space and

are looking into wind, hydro and biomass projects. We prefer the lower mid-cap segment because we see more reasonable valuations, and from a funding perspective, there is the most scarcity. There is a large universe of these companies and fragmented markets in Brazil and the whole region, which combine lower entry with good consolidation plays.

5. What is your outlook on the economic landscape shifting in Latin America outside of Brazil?

PH: We’re investing in the whole Latin

American region but from an equity perspective I would say that besides Brazil — Peru, Colombia and Mexico are very interesting for us. Brazil’s PE market is very well developed as far as larger funds are concerned. Regarding the mid-to-lower segments it is a different story. We would wish to see more fund managers focusing on that segment.

6. Why are Latin Markets’ events advantageous to attend?

PH: The added value for me is to meet a

lot of existing and potential new partners in a concentrated space to discuss new opportunities and market trends.


Is BNDES Brazil’s Largest Fund of Fund? Leonardo Pereira, Head of Investment Funds, BNDES Fabio Biagini, Manager, BNDES

1. Give us a brief background on BNDES.

middle-market companies. We also have a major stake in infrastructure.

LP: I’m Leonardo Pereira and I’m the

3. What is your opinion on how the quality of

Head of the Investment Funds department, which includes private equity, venture capital and seed capital. BNDES is the 100 percent state-owned Brazilian development bank. We have $300 billion in assets and the lowest MPL at 0.02 percent compared to the 3.3 percent MPL of the Brazilian national system. We have almost $45 billion in equity, not only investing directly and taking stakes in companies, but through funds with private equity. Our private equity allocation is around 7 to 8 percent of this $45 billion. The rest is invested in listed companies.

2. Which sectors are you currently focused on with your private equity investments? How much has infrastructure been a focus?

LP: We have a total commitment of

$1.1 billion through funds. Today our main commitment is to invest in seed capital, private equity, venture capital and infrastructure funds. Our portfolio is very well diversified with mid-sized enterprises and larger companies. We have investments throughout many regions in Brazil. Today, we have 33 funds and the majority of them are venture funds. If you consider the total commitment, private equity has a major stake. In terms of infrastructure, we have investments in ports, service providers, oil & gas and logistics. As a development bank, we believe we can have a good IRR in these segments. In terms of Greenfield projects, we could reach about 13 to 15 percent of total return in Brazil. We have investments with private equity in education, technology, life sciences, biotech and ICT. The majority of companies we invest in are small to

managers has progressed in Brazil over the last 15 years?

LP: The industry has been evolving a lot and there

are very good GPs now with strong teams. We’ve seen some good results with regards to financial and operational restructuring. In the industry today we have around 100 GPs and we believe there are around 40 or 50 that we would consider investing in. Some are more specialized in certain segments. In term of infrastructure, there are few that have the expertise. This can be difficult because we need to know deeply how this segment works in order to overcome the challenge of infrastructure in Brazil. Overall, if you look back 15 years, the industry has evolved a lot. We believe more GPs will come to the market and improve the base of managers.

FB: We have had an increase of better managers

in seed capital as well. We just started a new fund called Createch 2. It’s another fund in a series to provide capital for the seed market. Our role is to develop the market, so the next step is to acquire the right people to provide the right skills for the specific fund that we want to use to develop companies.

5. More specifically, where are your venture capital investments focused?

LP: BNDES has a large stake in the two big seed

capital funds in Brazil: Createch and Createch 2. The second fund is almost $100 million in committed capital. We succeeded in attracting new investors as well. This is a fund where we can invest in all Brazilian regions. We would like to invest in high technology companies and the total revenues for these companies could be up to $4 million. We should invest at least 25 percent of total committed capital in start-ups. In the first edition we’ve seen

very good output as far as internal IRR, but it’s not only the return. These companies have been awarded as very innovative companies globally. They have launched more than 300 new products and registered 30 patents. They have also increased qualified jobs while investing around 20 percent of revenues in R&D, which is very high in the Brazilian system. These investments will provide competitiveness in sectors such as new materials, nanotechnology, capital goods, ICT, biotech, life sciences and pharmaceuticals. It is very important to develop these new technologies in Brazil. The funds I mentioned are the two largest seed funds in Brazil, but we also have seven other innovation funds investing in biotech, ICT, life sciences, and oil & gas service providers.

6. Many have pointed to an over-

reliance on credit and consumption in the Brazilian economy, and now there is the shift to infrastructure and domestic productivity. How do you see the economy shifting in the coming years?

LP: Brazil went through a difficult period

in recent months but we believe there is a positive outlook for the coming years. There have been some bottlenecks in ports, airports, roads and urban mobility. The government has been trying to address financial engineering to support these investments and bring in new players such as banks and new investors. In terms of consumption, Brazil is one of the biggest markets in the world. Income has been increasing in recent years but family debt has reached a level that we should monitor. We try to foster infrastructure investments as a development bank as well as high-based technology companies because there is a lack of investment in these fields. In small and medium term enterprises, we try to attract new investors like family offices and angel investors as well.

7. What advantages have you found attending Latin Markets’ events?

LP: The event in São Paulo was very

important because it brought LPs and GPs to the market and it was a great opportunity to network and look at new trends. It is helpful to build to new partnerships to invest in new products.



The Elephant


1. Give us a brief background on your role at UBS and your career experience in the equity markets.

JM: I’m the CIO for Emerging Markets

at UBS Wealth Management. My responsibilities include tactical asset allocation across the emerging market countries. I also help orient the investment research team to come up with profitable investment themes for our clients using emerging market equities, bonds, currencies, corporate bonds and alternative assets. Before joining UBS two years ago, I worked for 10 years at the Rohatyn Group, a multiasset management company focused on EM. Prior to that I spent 10 years at Goldman Sachs in the equities research group – I was the Head Strategist and Director of Research for Latin America equity investments.

2. What is the geographic makeup of your clients?

JM: Our clients are truly everywhere in the

world, from Hong Kong, to Dubai, Turkey, Mexico, Europe and the US.

3. What strategies and trends have

you seen your clients taking to preserve and protect their wealth?

JM: In recent years, our clients have liked

bonds, and they weren’t wrong. The bond markets have been on a continuous rally for the last 20 years or so, until last year. The traditional way of preserving and growing wealth through bonds is no longer

infallible. A new approach should involve more equities and also some alternative assets like hedge funds, private equity and real estate. The straight line appreciation we’ve seen over the last few years in the developed world is not likely to continue. There are more headwinds now with the Fed tapering and the global recovery more priced in by the markets with valuations a little richer. Even though we are likely to see healthy financial markets because there is plenty of liquidity, it is likely to get choppier and investors are going to have to diversify more.

4. What has been the rationale of your

global clients when deciding to invest in Latin America?

JM: Latin America is not by any stretch

of the imagination a uniform area of the world. Like in the old spaghetti westerns you have ‘the good, the bad and the ugly.’ There are the reforming countries that have a robust macro framework where the rule of law works better and things are relatively transparent. I would put Chile, Peru, Colombia and Mexico in that category. Then there are the ‘ugly’ where populism has led to very unstable macro dynamics, where the rule of law isn’t respected and contracts aren’t protected. I would put Venezuela and Argentina in that category. And then in the middle you have countries like Brazil. They’ve flirted with populism enough to scare some private investors but are still at the point where they can reverse some of their negative trends. The Brazilian macro strengths are a little better

Jorge Mariscal CIO - Emerging Markets UBS Wealth Management than those in the ‘ugly’ category. It has plenty of foreign exchange reserves and segments of the manufacturing sector are very buoyant. But Brazil is in a predicament with a very large government, slow growth and high real interest rates because they have to fight inflationary pressures. When one talks about where to go in Latin America, you have to differentiate and be selective.

5. Are your clients more comfortable

investing in Brazil or the Andean region right now?

JM: Our clients have been gradually leaving

places that don’t offer the positive aspects I mentioned before. There are few left with any Venezuela or Argentinian exposure. We have investors that go there but they’re at the higher end of the risk profile. The bulk of the investors that go to Latin America for the first time are more impressed with the Andean region and Mexico. As an example, more than half the issuance of government bonds is in the hands of foreigners. Investors are being discerning and can tell the difference between the good, the bad and the ugly.

6. What are your thoughts on investing

in emerging markets given current account deficits in certain countries and turmoil in countries like Ukraine and Venezuela?

JM: Capital has been flowing from emerging markets into the developed world last year and this year. The first reason for this is that most of the macroeconomic news has been positive in the developed world and negative

LPEJ Q1 2014: UBS Wealth Management

for DM. The ‘delta’ on the margin has been in favor of the developed world with a stronger recovery in the US, an incipient recovery in Europe and ‘Abenomics’ in Japan. You turn to EM and the story is different. Brazilian growth has disappointed, there are questions about the strength of Chinese growth, Indian election uncertainty and then extreme events in places like Ukraine, Venezuela and Argentina. So you have macroeconomic deltas and market sentiment that are divergent. In addition, you have the threat of US tapering, meaning capital will become scarcer. Many countries had fueled growth through portfolio flows and domestic lending, and as rates began to rise these countries found this model was reaching its limits. Just like Warren Buffet says, “When the tide goes out you can see who’s swimming naked.” Countries like Brazil, South Africa and Turkey had to adjust with depreciations in the exchange rate and increases in the interest rate. If you look into 2014, despite not beginning the year well with Russia and the Ukraine giving us much to worry about, I think the environment will get better in the second half, once elections in 11 emerging markets have passed and there is more clarity in the political outcomes. Also, nobody is surprised now that the Fed is going to taper. Even if rates continue to rise, they will do so in a moderate fashion and, very importantly, because the US, Europe and Japan are all growing in a more sustainable fashion. This will mean support for commodity prices and support for exports from emerging economies to the developed world. Finally, the sentiment has gotten so negative on emerging economies that valuations have become extremely attractive. Equities are now trading at about a 2.5 standard deviation to their 10 year average. Overall, we are neutral in our global portfolio in emerging markets with a tactical asset allocation of six months because in that period we do not see the catalysts that will make capital flow back to the emerging markets. We need to see better economic activity and PMIs and industrial production numbers. In line with this, we need to see an improvement in export growth. We also need to see profitability improve. In the US and to a lesser extent in Europe, companies have been cutting costs and working on the bottom line and we want to see this in the emerging markets. You’re seeing some

also have these negative geopolitical and economic headlines, which need to come down.

7. What is your take from a private

equity perspective that there are more opportunities now in countries where it is not as crowded?

JM: The liquid markets have shown a

tremendous amount of volatility. If you don’t want to stomach that volatility, private equity offers a longer-term and more stable asset. You’re also unlikely to get 30 percent in liquid returns in the developed world every year. We believe those days are over. This is possibly going to make people revisit private equity and illiquid investments. The macro matters but in private equity this matters less because your exit period is seven or eight years down the road. We can look past the Brazilian elections and think at some point things will normalize, even potentially in Venezuela or Argentina. In private equity you need to be more microoriented and bottom up. Areas that are interesting to me in Latin America are related to the consumer and infrastructure. Even though economies have been going through difficult times, there has been the development over the last 10 years of what I call the ‘Facebook middle class.’ These are people that have reached critical levels of purchasing power, and have acquired the consumption values of those similar to them around the world. Values are homogenizing among the middle class globally. When they have the purchasing power and the same values of everyone else globally, they find that the government isn’t a good provider of several goods and services the new middle class desires. Education is a sector where the middle class is more willing to pay for private school because the government isn’t offering the high quality education their children now desire. You’ve seen a proliferation of private technical, secondary and university schools, and I think this will continue. This has happened with health care too. You’ve seen the proliferation with private clinics and hospitals. Then there is infrastructure. The government hasn’t been able to deliver, in places like Brazil, high quality

infrastructure that can meet the demand of the middle class. Toll roads have to be built by the private sector along with air ports and trains. Historically that area was difficult because the government was highly regulatory. In Mexico and even Brazil you’re seeing more rationality on the part of the government allowing for higher rates of return because they’re realizing if they don’t do this they’re not going to attract enough capital to achieve their objectives.

8. You mentioned some of the

negative headlines on investing in emerging markets. What is your view on how perception is playing a role in emerging markets investment decisions?

JM: If anything, I believe that

interconnectivity has grown globally. Trade within emerging markets has grown more than global trade and in this sense emerging markets are more self-reliant than they used to be. The global food chains of manufacturing have grown and spread in a big way over the last 20 years. It is difficult to see how what’s going in the Ukraine will affect Eastern Europe or even Western Europe, but it will. A more interconnected world means everything is going to affect everything. Emerging markets are less vulnerable than they used to be but they will remain volatile. An analogy I like to imagine is an elephant in a bathtub full of water. When the elephant goes into the water, the water goes over the edge, and when the elephant gets out, the water goes all the way to the bottom. The elephant is global capital and emerging markets are the water in that bathtub. Many economies as a result have been increasing reserves, moving to flexible exchange rates and finding ways to not allow short term capital to flow in and then leave in large amounts. In this way they have been better than 20 years ago, but there is still this increased global interconnectivity which persists. Mr. Mariscal will be making the Keynote Address, “The Future of Global Emerging Markets Investing” at the 4th Annual Hedge Fund Brazil Forum on April 3-4, 2014.



LPEJ Q1 2014: Abbot Downing

Energy and Banking in Mexico and Colombia Luis Torres Senior Investment Strategist, Abbot Downing

1. Give us a brief background on your role at Abbot Downing.

LT: Abbot Downing is ranked by

Bloomberg as one of the world’s largest multi-family offices. We currently have more than 600 clients and $38 billion of AUA. We are a component of the Wells Fargo Wealth Brokerage and Retirement Group which is responsible for $1.4 trillion under advisement. We provide custom investment solutions to an exclusive set of ultra-high net worth clients. Our clients have institutional type of mandates. They tend to have long-term goals and are typically willing and able to invest across all asset classes. I am a Senior Portfolio Manager with Abbot Downing. I advise client networks and each client has a detailed and customized profile. My clients have very long-term goals and we invest for them on a discretionary basis.

2. Where are your clients located across geography?

LT: Our clients are ultra-high net worth

individuals, multi-generational families and foundations and endowments. Abbot Downing has more than a dozen offices in the United States and serves clients in all 50 states. The majority of our clients reside in the US; however, we do serve clients internationally including Mexico.

3. You mentioned your investments

are discretionary. How do you go about selecting opportunities in Latin America?


LT: We are investors in Latin American

currencies, equities, sovereign debt, corporate debt and private equity. Within private equity, we have a tilt toward growth companies and infrastructure. Public markets in Latin America tend to be fairly volatile and this volatility creates opportunities. When you look at the volatility of the equity market from 1996 to today it’s close to 30 percent in Latin America. The S&P 500 has half that degree of volatility. Emerging markets valuations in general tend to have larger moves away from fair value relative to the S&P 500. With this in mind, we screen for countries that exhibit the best macro backdrop. To determine countries with favorable macro conditions, we look at changes in current account and trade deficits or surpluses. We also look at real yields by country. Countries that have high real yields with improving current account and trade deficits or surpluses can be attractive. With regard to equities, we ask ourselves if a local index is trading at a premium or discount to the S&P 500. The next point is the demographic tilt and we split this into three parts. How productive are these countries? What is the composition of the labor force? What is the behavior of the country from a political standpoint? Within Latin America, Chile is one of the most productive countries. This is the case because they have a government that is very stable. In addition, Chile has a robust labor force. The number of people between 15 and 64 relative to the entire population is favorable. We place a high degree of emphasis on demographics because we believe that future growth is dependent on this variable. Mexico and Brazil are also attractive from a demographic perspective.


4. Which countries have you invested in thus far for private equity?

LT: Mexico and Colombia are two countries where we have successfully bought and sold private equity positions. We are focused on energy and banking.

5. What was your experience in

Colombia specifically given less developed markets for private equity?

LT: Each asset class requires a different

skill-set. Capital flows in relation to the size of the capital markets in Latin America, which helps to explain some of the extreme volatility I noted earlier. This is applicable throughout emerging markets, including Colombia. When you invest in Latin America, including Colombia, you need local expertise, consistent sources of deal flow and an ability to leverage relationships. Before making a particular investment, we like to have a plan of how and when the money will be returned back to our clientele.

5. Are you looking to make additional allocations to Latin America?

LT: Our firm has an internal due diligence

team which travels to Latin America on a regular basis. We have recently added a private equity buyout fund which focuses on Brazil, Mexico, and Colombia and a hedge fund which focuses on Brazil, Chile, Colombia, Mexico, and Peru.

shoe leather and 800 Pound Gorillas

Mike Hennessy Managing Director Morgan Creek Capital Management

1. Give us some background on

Morgan Creek and your role at the firm. What are your assets under management?

MH: Morgan Creek was founded by

Mark Yusko and me in 2004 when we spun out of UNC Management Company, the endowment investment entity at University of North Carolina at Chapel Hill. Over many years, we had seen that the endowment model of investing was not only an excellent one (and arguably the best from a risk/return standpoint), it was highly appropriate for and sought by many smaller endowments and foundations, family offices, pensions and even wealthy individuals. At the same time, it was clear that the practice of the model was very inconsistent and too often sub-optimal, if not outright disappointing. The reason for this is that the model, to execute well, is expensive, difficult, and requires significant scale, resources, skill and experience. We wanted to make the model available to a much wider audience who deserved and


needed it as much as, if not more than the big E&Fs, and who just didn’t have the scale, resources, experience, skill, or desire to do it themselves. As of December 31, 2013, we had roughly $6 billion in AUM through a variety of commingled funds and advisory accounts, both discretionary and non-discretionary. We are headquartered in Chapel Hill, NC but have about 50 people in six offices including New York, Asia and Europe. 

2. What is your client makeup across geography?

MH: Our clients are primarily based in the US,

though a material and increasing contingent are from Europe. We haven’t marketed much outside of the US. We have a variety of endowments, foundations, pensions, family offices and UHNW clients. Most of our clients have a mandate to be diversified globally and by asset class. However, some want more of a ‘rifle shot’ exposure to broad private equity, China


private equity, venture capital, or even just global emerging markets. Regardless, most are interested in garnering sufficient diversification globally, with almost all having an abiding interest in emerging markets generally, on a diversified basis, including exposure to Latin America.

3. What is your clients’ rationale when deciding to invest in Latin America?

MH: We have had a keen interest in emerging

markets generally and have traveled extensively before Morgan Creek and even before UNC. One learns much by doing so, as long as you are sufficiently discriminating and time efficient. Our philosophy is to generally look at more geographies, sectors and strategies than the average investor. Of course, Mexico and Brazil are the 800 pound gorillas in Latin America, and some of the best opportunities and fund managers can be found there. But we also have found interesting and attractive investments throughout the entire region, and have made both private and public investments

LPEJ Q1 2014: Morgan Creek Capital Management

in a variety of sectors in Brazil, Mexico, Colombia, Peru, Chile and Argentina. We like selective natural resources, energy and infrastructure, consumer-related sectors, and real estate, among others.

4. Have you taken a country-specific or pan-regional approach in Latin America?

MH: It has always been our philosophy that

one way to gain the edge is to specialize, whether by sector, geography, style, size, or a host of other factors. Hence, while we have strong generalist and pan-regional managers, we always try to find and employ some country-specific managers with a demonstrated edge and a complimentary function for our portfolios. However, we don’t want to assemble too many of these managers, as that would dilute the overall value, and result in greater demands and stress on our most precious resource: time.

5. What private equity strategies does your firm prefer?

MH: Our private equity focus in Latin

America in some ways reflects our focus in

“ Of course, Mexico

and Brazil are the 800 pound gorillas in Latin America.” other developing regions, though it also has qualities unique to Latin America. In private equity, we generally still like the consumer sector where there are many new basic and innovative products and services for the burgeoning middle class, as well as high end consumers. We have some real estate investments that play to different markets, from the low end to the high end. We continue to like certain natural resource and energy plays, as well as select infrastructurerelated areas, though many seem to be getting fairly if not fully valued. But there are opportunities in most sectors on the private side, which is a much more robust area than the public markets, in our view. 

6. How do you go about evaluating opportunities in Latin America?

MH: We source and evaluate Latin

American opportunities by using all the tools we can muster. Our best sourcing and reference checking comes from our current network, which we’re always trying to enlarge and upgrade. This includes our current and prospective investment managers, our peers and associates on the buy side, public and proprietary research sources, and our ‘shoe leather’ and internal processes borne of years of experience – and attendant biases therein. We are big believers in being on the ground, preferably with a full time presence and speaking the languages, though we are not there fully yet in Latin America. 

7. What are your thoughts on

investing in emerging markets in light of account deficits in certain countries?

MH: We don’t take a knee-jerk reaction

with respect to current account deficits. You have to understand the highly complex dynamics and drivers behind them, the trend and timeline going forward, what the market has priced in, capital flows, currency dynamics, sensitivity to other economies, holdings of foreign exchange reserves, etc. In general though, there are headwinds where a variety of fundamental data is poor, e.g., where you find current account deficits along with slow/slowing growth, fair/full valuations, currency devaluations, etc. These typically take some time to get fixed, if they ever do. Compounding this are the global central banks and their policies and printing presses. Just given its size, we would want to be careful about Brazil in this regard.

8. What is your outlook for Latin

America in the coming years and which countries would you like to focus on? What is your timeline for additional investments?

MH: Latin America will continue to be

Even though we are concerned with Brazil’s metrics, we see continued opportunity there given its size and available manager talent. Mexico looks more interesting. But the frontier markets of Latin America will increase in importance as they develop further and the manager talent becomes more apparent. Even Argentina with its economic issues has various compelling attractions, some of which are due to the correction that has taken place in some of its markets. 

9. What has been your experience with due diligence in the region?

MH: Due diligence can be relatively difficult in the region, perhaps one reason the region is under-represented with global investors. It is a large region with rather heterogeneous markets. There is a language issue for English speakers, although many if not most managers speak English. But finding the very best opportunities and vetting and referencing the people involved have been our biggest challenges. One advantage the region for US investors are the consonant time zones. 

10. What is your take on the quality of managers you’ve found in the region?

MH: The quality of the managers in Latin

America spans that found anywhere else in the world: from excellent to terrible! In our opinion, there seems to be a dearth of high quality managers compared with developed markets, but this is to be expected, and not necessarily bad. In fact, it should make for a less efficient and hence better opportunity set, especially for investors that can identify and access the best talent. Mr. Hennessy will be speaking on the “Executive Roundtable: A Conversation with International Fund of Hedge Funds” at the 4th Annual Hedge Fund Brazil Forum on April 3-4, 2014.

an interesting and increasingly important region in the future, especially in light of the fact that it seems to be under-represented on the radar screens and in the portfolios of global investors.



dry powder and patience 1. Give us a brief background on your role at Greycourt & Co.

DL: We have about 60 clients with an

average size portfolio of around $180 million. There are some clients with $50 million and others with $1 billion plus, but our sweet spot is around $200 million. When we’re structuring an asset allocation we include 10 to 20 percent in private equity. We want our clients to have private equity exposure in the US and outside – ideally about 50-50. If we’re targeting, say $30 million to private equity, and we want to have exposure to venture, buyout, secondaries or distressed, we are most likely to use fund of funds. We have a strong bias for the lower-middle market everywhere. In China, it will be more growth equity but the buyout market hasn’t unfolded there yet. In Latin America, we don’t have as long of a history as we do in Asia and Europe. We only recently stepped up and we’ve been committing to 57 Stars out of Washington, DC. Not only

David Lovejoy Managing Director - Greycourt & Co.

LPEJ Q1 2014: Greycourt & Co.

have they been doing it a very long time – they helped certain countries start their private equity programs when they were at OPIC. I am the Partner at Greycourt primarily responsible for our private equity research and advice to clients.

2. What is the geographic makeup of your clients?

DL: Ninety percent are US-based but we

have some in Latin America, Canada and Europe. One area where we would like to increase our presence is in the southeast of the US.

3. When did you begin investing in

Latin America? What was the rationale behind investing in the region?

DL: We began two or three years ago. We

wanted to continue to diversify our activities in emerging markets. We’ve always been

company managers are more dependent on operational improvement and market and product line expansion to get their EBITDA growth, rather than riding on the back of a fast growing economy. This is where experienced private equity managers can add real value. Now is the time for dry powder, and patience-patience-patience.

4. What advantages does investing in

private equity in Latin America provide? Do your clients have a specific interest in the region?

DL: Because our clients are wealthy, the

strategies tend to be to stay rich rather than to get rich, so the word you don’t hear that often is ‘opportunistic.’ In private equity that’s exactly what it is. You’re capitalizing on opportunities where the public markets won’t or can’t go. So you really reduce the amount of information available, but you have much greater say in the final outcome

“ Now is the time for dry

powder, and patiencepatience-patience. ”

able to pursue the mega funds in these markets, but we’ve never had an inclination to do that. We’re now looking at countryspecific fund managers who have a track record of operational improvement. In Latin America, we’re interested in buyout and growth equity. We want managers that have operating capabilities. If you consider the headwinds in emerging markets, they’re being felt most in currencies, to some degree in debt, and certainly in the stock markets. With the right private equity manager these factors can in fact be beneficial. For one, your private equity is worth more than it was yesterday because of capital outflows. If stock prices go down, purchase price multiples go down. Third, you can see seller expectations softening. As growth rates slow, the operating

through operational improvements to companies, or by developing cross-border networks and expanding product lines. You can time your entry points and to some degree your exits. There is much greater latitude in developing strategies to expand and grow a business, and management’s interests are better aligned with ownership. In Latin America, our private equity investments tend to capitalize on increasing levels of domestic consumption. If you look at the various stock market indices in the region, they’re all heavily weighted to financial services, real estate, infrastructure or utilities. We wouldn’t commit to a manager who is hot in pursuit of real estate or infrastructure investments because of the associated risks, and there is less scope for influencing and increasing value. Presently, the countries most interesting to us are

Peru, Colombia, Brazil, Mexico and to a lesser extent Chile.

5. Which strategies and sectors are

you interested in for future allocations in Latin America?

DL: In the countries mentioned above,

though a little less to Brazil because we’re not seeing as many mid-market opportunities there and competition is intense. It will still be an attractive longterm opportunity however. A lot of the funds are going to be forced to put their investments to work in Brazil because they need to put bigger chunks to work. Peru, Colombia and Mexico are harder to penetrate. We’re interested in country specific funds and managers that were perhaps educated in the US, who have proven track records, and who know the important families and government policy in the region. We tend to stay away from infrastructure though there are service providers to infrastructure that are interesting. We see the greatest opportunities throughout EM in growing domestic consumption, including areas like health care and services, education, durable goods, travel and leisure, mobile communications, etc.





LPEJ Q1 2014: W Advisors

Brazil’s Family Offices and the Endowment Model Leonardo Wengrover Founder, W Advisors

1. Give us a brief background on your

5. What type of managers do you prefer

LW: I founded W Advisors nine years ago

LW: You have different fund managers for

role at W Advisors.

in 2005. We are a multi-family office based in the south of Brazil. We serve around 30 families in Rio Grande do Sul and Santa Catarina. I am a civil engineer and have a degree in finance and economics.

2. How are your investments broken out domestically and internationally?

LW: We have invested 65 percent

domestically and 35 percent internationally.

3. What is your typical ticket size? LW: Between $1 million and $5 million.

4. Which sectors are your investments focused on domestically? And where are your international investments focused?

LW: We have investments in all asset

classes in fixed income, multimercados or hedge funds, stock markets, venture capital, private equity and real estate. We are investing overseas in these asset classes except for private equity because we are only beginning to access the asset class. We prefer to start locally first and work with the managers. We don’t focus on a specific sector. We have invested in IT companies, early stage retail companies and some real estate.


to invest with?

different expectations and needs. We are looking for mid-size fund managers who we can grow with. We don’t want to invest with big names. On the other hand we don’t want to invest with very small managers because we need a certain level of comfort with their experience level.

6. What type of approach do you take to investing with private equity? Is there a certain model you follow?

LW: The endowments and pension funds in

the US have been providing good alpha for their customers. They have 15 percent invested in real assets, 26 percent invested in private equity and 50 percent invested in absolute returns. The idea is to show our clients that the more they approach an endowment model, the more successful they will be. Of course different families have a different need for liquidity and they are not endowments with regards to liquidity. But we would like to approach those models to benefit from those returns.

7. What has been your experience with

preparing the next generation to preserve and grow their wealth?

LW: It’s important to engage the next

generation in family enterprises, not necessarily to work in the family business, but to prepare them to be an entrepreneur. We’ve been working in the family governance to develop this kind of entrepreneurship.


Investing through private equity is a great way to find opportunities that will engage the family members. It’s important to provide intellectual capital to the next generation.

“ The idea is to show

our clients that the more they approach an endowment model, the more successful they will be.”

8. What is your timeline for making private equity investments abroad?

LW: We are considering foreign

investments. We know that developed countries might provide safe opportunities but we really want to participate in the developing process of Brazil. It’s partially rational and emotional. I’m passionate about Brazil because we have great opportunities here.

9. What advantages do you find attending Latin Markets’ events?

LW: The event in São Paulo was my first

time at a Latin Markets event. The event agenda was verily to the point, instead of being too overarching. There was also a great selection of attendees to network with.

LPEJ Q1 2014: Morgan Stanley Private Wealth Management

An Increase in PE Across the Board Ernesto de la Fe Head of Latin America

3. What is your take on why this is?

Morgan Stanley Private Wealth Management

EF: There can be a liquidity trap. Given the

1. Give us a brief background on your

4. Which strategies are your clients

EF: I’m the Managing Director for the

EF: We’re looking across the board. We’ve

role at Morgan Stanley Private Wealth Management.

International Wealth Management of the Americas team. The group oversees the financial advisors and clients that are international in nature.

2. Have your clients become more interested in gaining exposure to private equity and international investments?

EF: You’ve seen a huge increase in

alternatives, including private equity in the last 10 years. Our firm and others are satisfying that need — anything from real estate to infrastructure and all across the board.


rates right now, you have to do something, or you can stay with low yield on the fixed income side. People are realizing they don’t need as much liquidity as they think they need. They are more open to sacrificing liquidity for high yield.

utilizing in private equity? Which sectors and themes are they looking at?

been looking at real estate and tend to be more fund-focused. We’re one of the largest in the world in focusing on global real estate investing. We were able to take advantage of the distressed market and we’re closing that fund. We’re also seeing more interest in people buying actual buildings. On the infrastructure side people are realizing there is huge demand globally. As far as regional themes, 70 percent of our clients that we cover in Latin America see an opportunity to go into a private equity fund that focuses on a different region.


5. As a global firm, how have you

worked to tailor different types of investments to your clients in Latin America?

EF: We have a modeling group that

provides advisory to our clients in the ultrahigh net worth space, so we can give an assessment of potential predicted returns. If you look at historic private equity returns, you can replicate them more than maybe

“ People are

realizing they don’t need as much liquidity as they think they need. ” any other asset class. When you see the top players, they’re more consistent across the board. We can incorporate private equity and alternatives within the overall portfolio, and calculate the yields and cash flows that are necessary. We take into account that we will need X amount of cash for this investment over the next five years, and a lot of people don’t have this option.

LPEJ Q1 2014: Morgan Stanley Private Wealth Management

In family offices they say, “I know exactly what I’m looking for,” so there isn’t much modeling to be done. In other cases, we’re a one-stop shop. It depends on the client.

6. How have you worked to navigate the emotional aspect when clients or families invest?

EF: We love working with family offices. It’s easier with a family office because you have professionals that are also trying to help the client. It becomes more difficult when you have a significant investor that makes their money in a non-financial area. At the end you don’t force clients to do anything. I always tell my clients, if you don’t feel comfortable and can’t fall asleep at night then don’t do it, even it might make you more money. If we think it makes sense, we tell them how and why other clients are looking at these products. But if they aren’t like that client, then fine. It’s an educational process and not a pushing process.

7. What is your outlook for emerging markets and Latin America in light of some country account deficits and Fed tapering?

EF: We all saw what happened when the

Fed said they weren’t going to stop easing anymore. The more the developed market becomes increasingly pricy — the natural flow will be to emerging markets. It’s a fluctuating category depending on where people are. The question is: what is your risk and volatility appetite? Some clients feel comfortable when prices fluctuate if in the end they know they will achieve returns. It’s client specific.

8. How do you see private equity

plays in Brazil and in the rest of the Latin America given the current economic conditions?

for the window and when it comes — take advantage.

9. What advantages have you found attending Latin Markets’ events?

EF: I have attended a couple of your events and I’m very impressed with what you’ve been able to do. I think this was your first time in Miami, right? You were able to get different kinds of people and a good mix of people between family offices, fund managers and wealth managers. I’m impressed. Mr. de la Fe spoke on the panel, “The Future of

EF: For a smart investor there are always

opportunities. If you are a confident private equity investor you will find the opportunity. The thing about private equity, especially in Latin America, is what is your exit? You may have a good opportunity like the agriculture plays in Brazil you’ve seen some good exits, partially because there is global demand. When you’re talking about specific businesses, this becomes more difficult because the breadth of investment and liquidity is not there. The big private equity funds have to be ready

Wealth Management in Latin America” at the Private Wealth Latin America & The Caribbean Forum” on October 24-25, 2014.



LPEJ Q1 2014: Claritas Investimentos

Claudio Mifano Partner, Claritas Investimentos Wealth Management and the Top Funds in Brazil

1. Give us a brief background on your role at Claritas.

CM: I’m a Partner at Claritas and I’m in

charge of the wealth management division where we focus on clients with over $5 million. My job is to help our HNW clients take care of their wealth. Our clients are mainly Brazilian though we do help to supervise their assets abroad. One trend we’re seeing is that Brazilian investments are growing overseas. We had high interest rates in the past so it wasn’t as common to invest abroad. Now our currency has appreciated and the interest rate has become lower. It’s increasing slightly now to 7.25 percent which is still high compared to international levels. The concept of diversification has also become important.

that focus on sectors while others are more general. Some focus on infrastructure, health care, education and business services which are definitely opportunities in Brazil. Agribusiness in Brazil is also very strong. There’s a lot of room for improving governance for private equity funds. The sector focus ultimately comes from the private equity funds and the HNWs will receive the offering and see if they like the story.

4. In your view, who are the top funds in Brazil right now?

CM: There’s Tarpon which was more focused

with private equity in Brazil?

on public equities and has become a strong player with private funds. You also have Patria, DGF and the big foreign firms that attended your São Paulo event. The ones that have been in Brazil for a long time have the advantage. There are also some of the smaller or middle market funds that can be interesting.

CM: Private equity is now something more

5. What has been the manager selection

2. What is your clients’ experience people are talking about. For Brazilian families who were entrepreneurs that might have grown and sold their company in the real economy, only buying public bonds is not enough. The asset class is more restricted to the really HNW people but we’ve seen some young companies in Brazil being acquired by private equity funds both domestic and foreign.

3. What sectors are your clients

looking at in Brazil with private equity?

CM: In the last few years the clear case

was the consumer and the appearance of the new middle class in Brazil with more purchasing power. There are some funds


process in Brazil? Do your families invest directly or have they preferred investing with managers both domestically and abroad?

CM: We are more focused on Brazilian

managers. We do investments in three ways. One is through fund of funds so we can access different funds and sectors. We prefer to go directly through managers that we know have experience in the markets. We look for their edge in the market or if they’re doing a majority or minority stake, etc. Certain managers don’t work for some clients. It’s easier for our clients to invest in something they know. The third approach is direct investments.


6. Could you speak to a time when

the emotional aspect played into the family’s decision to invest? Also, have there been instances of navigating trans-generational wealth?

CM: Emotion for sure has its role. When

we invest in the financial markets like equities and bonds this is not as important. Regarding a client’s preference, this is more important on the private equity side. It’s more about the perception of risk. As for the transferring of wealth to generations, we like to start the education as early as possible to be prepared for the day when they need to take care of their wealth. Sometimes we have three generations in a meeting which is interesting. It depends on if they have liquid or illiquid assets as well.

7. What advantages did you find

attending the Private Equity Brazil Forum?

CM: It was a great opportunity to hear

views from the leaders in the industry as well as people from other countries. It’s about getting to know where the industry is heading and what people are talking about.

LPEJ Q1 2014: Itau Private Bank

Charles Ferraz Chief Investment Officer, Itau Private Bank UHNWIS and Direct Investments in Brazil

1. Give us a brief background on your role at Itau Private Bank.

CF: I’m in charge of providing investment advisory to Itau Private Bank clients in Brazil. We help clients to manage their wealth in terms of asset allocation and product selection.

2. How much of your clients’

investments are domestic as opposed to international?

CF: At Itau Private Bank we are focused

on Latin American clients and most of our clients are Brazilian. Brazilian investors tend to have most of their money invested locally and I would say about 80 percent is onshore and 20 percent is offshore.

3. Are you seeing a trend into more international investments?

CF: I think this is a trend you will see more of in the future. I don’t foresee having 50 percent or more abroad but I do see an increase in client interest for non-Brazilian investments. Something that has slowed this trend is the local interest rate. From our clients’ perspective they have access to risk-free investments with double digit and liquid returns. This has been a barrier for offshore investments, but we still see an increase.

When interest rates dropped, clients moved to increase credit risk and invest more in private equity and other investments that can provide a higher rate of return. Some clients are very familiar with private equity investments. We have a lot of entrepreneurs

so it’s an easy conversation to talk about venture and private equity. We see an increase in international and more illiquid investments in the coming years.

4. What strategies are some of your

clients looking at both domestically and internationally with private equity?

CF: Our clients are more comfortable

investing with local private equity because they know the market better. Another trend we’ve seen with ultra-high net worth clients is co-investments. Direct investment in private equity locally is something we’re seeing more and more. We have international private equity alternatives, but it’s not as easy of a conversation. When our clients invest abroad it’s mainly in the US. The main focus is diversification. In the past it was very concentrated on specific credit and market risks.

5. What are your thoughts on the shift in the Brazilian economy towards more domestic productivity and increased investment in infrastructure?

CF: The scenario is going to be very different

than it was in the past. The US economy is going to start growing again and the monetary policy around the world will become less stimulative. Emerging market economies have to do their homework now. There are some countries that are better prepared for this environment while others are not. Emerging markets are now better prepared in general than they were before however. Every time you see a tightening cycle in the most developed countries in the world you see emerging markets suffer. Yes, it will be

more challenging, but emerging markets are better prepared now. In the case of Brazil, we have some good numbers such as higher international reserves. An important challenge we see here is the internal debt to GDP ratio and the prospects of the fiscal policy. One of the main critiques for the performance of the local economy is the lack of infrastructure, and the government has the same diagnosis as well. We see this as an investment opportunity. We’re going to see more programs to stimulate these kinds of investments. In order to stimulate infrastructure investments, the government created some incentives, such as tax exemption on investments in local fixed income instruments. We started to see more and more client interest on debentures and local fixed income instruments with tax incentives. Clients here can buy long-term bonds at very good rates considering the credit risk and the tax incentives. We will see more in fixed income, private equity, and investments related to infrastructure.

6. What advantages have you found attending Latin Markets’ events?

CF: Your events are great opportunities to

talk to people and hear different viewpoints on what is going on in the markets. Mr. Ferraz spoke on the panel, “Brazil Private Wealth Roundtable” at the Private Wealth Latin America & The Caribbean Forum on October 24-25, 2013.



LPEJ Q1 2014: Cisneros Group

The DNA of

Private Equity still have a large pool of corporate assets, it becomes more difficult to justify investing with managers when we have our own assets.

Gabriel Montoya CIO, Cisneros Group

1. Give us some background on the Cisneros Group and your role at the firm.

GM: I work for the Cisneros family, which

is originally from Venezuela. They’ve been in business for over 80 years, and at one point or another, the family has had assets in every country in Latin America and also the US. About four years ago we decided to formalize the creation of the family office and make a clear separation between corporate assets and family assets. I started this process about three years ago and we now have clear defined pools of assets. My job is to now oversee the personal side.

2. Which sectors and asset classes

have you focused on historically and how have these evolved over time?

GM: We invest across asset classes. When

For the last 20 years, our core business has been media, entertainment and communications. Throughout our 80 year history we have been in other industries, from industrial, to retail and manufacturing. The family has a private equity spirit embedded in their DNA because all the companies they’ve owned, they’ve sold. The holding periods are longer and not all the investments were made with that in mind. We’ve owned some of these companies for 50 or 60 years. We had invested in the Pepsi-Cola franchise for over 50 years which was the most successful operation franchise in the world. We owned about 90 percent of the market. We switched to Coca-Cola in 1996 and eventually sold the company. Obviously a private equity fund won’t hold an asset for 50 years. In Latin America, holding period is still a factor. If you’re a private equity investor in the region you need to have a longer view than what is typical in developed markets. We have always had that entrepreneurial investment spirit, doing both direct investments and co-investments with managers. For example, we owned Spalding in 1991 and 1992 because they were distressed and it was a leveraged buyout in the US. It had nothing to do with our core business but we thought we understood retail and international markets. We turned around and sold it to KKR seven years later. If you look at the group’s history there are a lot of transactions similar to this.

it comes to private equity, because we



3. Discuss the family’s investment

in Direct TV. What was the rationale behind making this investment? Why is Latin American media a core focus of your portfolio?

GM: We’ve always seen Latin America as

our market coming from Venezuela. The group grew to a point where we needed to expand. This happened in the late ‘70s and early ‘80s and the family invested in areas they were familiar with internationally. Then we became too diversified and started narrowing to industries we had better capabilities in such as media. We launched Direct TV in Latin America in the late ‘90s, which was a joint venture. It was launched in Latin America at the same time as it was in the US. We had the knowledge of the paid television business and the company business and so we acquired a lot of paid television channels to complement the Direct TV platform. The investment was a vision our Principal had of technology making a change and improving the overall lack of infrastructure in Latin America. If you can reach a household with a satellite, it’s going to allow you to access a larger market. Direct TV became the largest paid television operator in the region. This was a venture investment because we started from scratch and a

LPEJ Q1 2014: Cisneros Group

very clear and the other family members understand their role. We’re concerned with generation three and onwards. So we need to focus on the educational process and prepare them to be responsible owners to avoid potential problems. The family’s art collection is a very emotional asset. Name any major work of art, from the Masters to very prominent Latin American artists – we have it. It is well known to be the largest well known collection of Latin American art in the world. This year it was at the Reina Sofia museum in Spain. Next year it’s going to be at the Royal Academy of Art in England. The collection is made up of 60,000 pieces of art.

business plan. We put a lot of money into it and brought private equity investors in to invest with us — Hughes and Bessemer Venture Partners. When the business matured and became more successful, we sold it with a return. We also invested in Univision, and Televisa which we sold to Private Equity Group in 2006. We still have a strategic partnership with the company. We’re very opportunistic when it comes to private equity investments. We don’t usually invest with managers because we have the ability to invest in-house on the corporate side. We work with investment banks to support the transactions, but we source a lot of the deals with the contacts we have in the region, and then gauge the deal internally.

4. What are some of the challenges

you have encountered when growing and preserving wealth for the family?

GM: When you look at our investment

portfolios they are relatively small compared to the pools of assets that are on the corporate side, in real estate holdings, or even in art, where there is a significant amount. The family never intended their art to be an asset class, because it is a collection, but the value is much more than other areas. Our situation is unique because other families tend to sell their family business and then go on and invest in a diversified portfolio. We sell one and then re-invest in another and some of that goes back into the family portfolio, and so on.

The challenge we have now is governance and creating the structure so these dynamics can continue. Some of the things we heard in the discussions at your event in Miami explained it’s not only how you grow wealth, but how you preserve it in the coming generations. If you ask me, these are the biggest challenges. We know this generation and the next will preserve the wealth, but we don’t know two or three generations down the road. So we have to make sure next generations will be provided for. If you look at statistics, the third generation is where most fail. One of the things I mentioned in my presentation was that the next generation has to be well prepared. Having governance, controls, education and management infrastructure to deal with everything are crucial to handling wealth. Investing money is easy compared to all of these other factors. You can measure returns easily but with generational transfers different problems can arise. This requires the commitment of the family members and it touches on issues that could be sensitive.

5. Are there specific instances

where you have encountered transgenerational challenges and how were they resolved? How have you navigated emotional attachments to investments?

GM: Fortunately we don’t have issues right now. We have generation two, three and four on the table right now. Generation two, the patriarch of the family, and my principal, is still in control. The rules are

The family has acted as collectors and stewards for Latin American art by promoting and preserving Latin American art around the world. When we told them that this is a significant asset with a lot of value, they said this is not an investment, it’s a collection. There have been years of discussions to make the point that yes it’s a collection, but it’s a very important asset that needs to be treated as such. You need tax planning and succession and everything that needs to be planned for. You need to have these conversations because if somebody passes away these assets will not have a clear guidance on how they will be managed.

4. What advantages did you find

speaking at the Latin America & The Caribbean Private Wealth Forum?

GM: As we become a more mature family

office, it’s important that we establish more relationships with our peers to learn from others experiences. There are also consultants who have lot knowledge. Even though we can access a lot of people you never know who has a good idea. We now have a more mature and established infrastructure, it’s important to continue to reach out. Our experience can only take us so far. Mr. Montoya spoke on the panel, “The Family Office Roundtable” at the Private Wealth Latin America & The Caribbean Forum on October 24-25, 2013.



LPEJ Q1 2014: EIG Global Energy Partners

How EIG Purchased Bati sta’s LLX Kevin Corrigan, Senior Vice President, and Derek Lemke-von Ammon, Managing Director at EIG Global Energy Partners, spoke with me about their recent rights offering for Eike Batista’s ports and logistics center LLX, now Prumo Logistica S.A.

1. Give us a brief background on your roles at EIG Global Energy Partners.

DL: EIG is a specialist investor in the energy sector. We define energy fairly broadly as upstream oil & gas, power and renewables and related infrastructure. The firm was founded over 30 years ago and we’ve been an independent firm named EIG since 2010. We’re global and headquartered in Washington, DC with offices in Houston, London, Rio, Sydney, Hong Kong and Seoul. Our focus from an investment perspective is to partner with large energy companies. We’re a solutions provider, taking a project finance approach to developing assets. We did a project in Brazil recently when we became a control investor in LLX, Eike Batista’s infrastructure company, which has recently been renamed, ‘Prumo Logistica S.A.’ My role is Head of Capital Development. I intersect with the investment team when we’re doing large transactions where there’s co-investment from our LP partners. My dayin-day-out job is working with institutional investors to raise capital for the firm. We just closed our 16th energy fund with $6 billion in total commitments, which is our largest ever.

Kevin Corrigan Senior Vice President



Derek Lemke von-Ammon Managing Director

KC: I’ve been with EIG since 2005 when I

was brought on to expand our efforts in Latin America, given my previous background with the Inter-American Development Bank and Chemical bank, where I largely focused on Latin America structured and project finance transactions. We decided to open an office in Rio de Janeiro in August of 2012 after we had built up a portfolio of nearly $700 million in Brazil. Today, I continue to focus on Brazil and Latin America more broadly.

LPEJ Q1 2014: EIG Global Energy Partners

2. More broadly, what type of energy types do you focus on within your portfolio?

DL: We invest globally but about 60 to 65

percent of our capital is invested in the US. About half of what we do is upstream oil & gas. We’re also active in the power sector which includes conventional power generation, as well as solar, wind and other forms of renewable energy. We’ve invested all of these technologies.

3. What are some of the specifics of the LLX deal which was recently completed?

KC: Eike Batista had a very integrated and

large dream, starting with OGX as the E&P arm. OSX was supposed to be a ship building arm which would tie in to the E&P. He then developed the mining asset called MMX. Mining was in his DNA because his father was the Chairman of Vale and a former Minister of Mines and Energy. There’s a story, I don’t know if it’s true, that his (Batista’s) father said, “Stick with mining because that’s an industry you know,” but he didn’t follow his advice. He also had the electric energy firm which was the first asset that was sold to E.ON of Germany, and they changed the name to Eneva. The second to be sold was LLX, which was a ports and logistics center in Rio de Janeiro state. In both cases, these assets were very far along, though there was still work to be done, so arguably they were the best assets he had. We came in and did a rights offering of 1.3 billion Reais for LLX. It’s a publicly traded company so there was a minority float of 20 percent. Eike was diluted down about 20 percent to 60 percent and OTPP had about 20 percent. We ended up with close to 53 percent as a controlling shareholder and we’re now in the process of getting our arms around the asset, finishing construction, restoring confidence and getting customers signed up. LLX was running out of money and things were getting sidetracked. People were sitting back and not wanting to finalize things, so there’s a lot in the pipeline and we think

with our presence and the fact that we’ve recapitalized the company, we’ll be able to bring a lot of those contracts to fruition. It’s a three pronged approach. You look at the management, finalize construction and get the commercial side restored, because it was partially in place already.

We continue to look at opportunities in Europe, Asia and Australia. Africa is a little tough for us though we did do a transaction in South Africa in the solar space. We are looking to expand in Mexico, Colombia, Peru and perhaps Chile.

DL: I’d also like to mention, the ports are

with the energy regulatory landscape in Latin America?

situated at the intersection of all the activity as Petrobras and others are developing their pre-salt discoveries. Prumo will principally be a logistics hub for the oil & gas industry in Brazil and secondarily for the iron ore industry.

KC: There was also a joint venture with

Anglo American that was part of the deal. They have a big mine that they’ve been developing in Minas Gerais, and almost finalized an iron ore slurry line to export from this port. This isn’t our main focus however. We’ll be emphasizing the oil transshipments and logistics side of the business.

4. Going forward, which energy types and countries will be your focus?

KC: We have exposure to about 35 countries right now. We have done some CLOs in the past and a clean energy fund that was run out of Europe which gave us exposure to solar, wind and biofuels. Each of our offices has a certain specialization. Our Washington office is our power center, Houston is needless to say oil & gas, London has been the renewables/clean energy office and Sydney has been a mining and logistics center. We draw on each of these teams for our transactions. The Prumo transaction was led by one of our colleagues in the Sydney office.

We are very focused right now on Brazil and we’d like to continue to work in Brazil, but we want to have broader exposure certainly in Latin America. In Brazil we’ve tried to build a portfolio that doesn’t have too much foreign currency risk because our funds are denominated in dollars, but also with a certain industry focus. We’d like to have some power exposure and we’re looking at several possibilities there as well.

5. What has been your experience KC: We acknowledge that there’s a

complicated regulatory environment and it’s of course an important part of our due diligence. We wouldn’t go into a project where it’s too incipient or if a project is just beginning to be developed, because if you don’t have the permits and authorizations, it can be a quagmire. In the case of Prumo, all the permits are there – it’s a matter of finalizing the project. We’re invested in Sete Brazil which involves shipbuilding and ultra-deep drill ships chartered to Petrobras. The Bolivia to Brazil Pipeline is a mature asset that’s the premiere gas pipeline in South America. Manabi is a mining project, which has some development issues. But we wouldn’t go into a complete Greenfield project.

6. Lastly, what do you find valuable

about attending Latin Markets’ events?

KC: The event in São Paulo was interesting

because we opened an office in Brazil in 2012. We’ve become better known as we’ve completed more transactions. Our portfolio in Brazil is now $1.3 billion so we saw this as an opportunity to continue to enhance our profile. We signed up as one of the sponsors and it’s been a great networking event.

DL: We had a few existing investors that

were participating so after the cocktail party we took the group out to dinner, which was productive. Mr. Corrigan spoke on the panel, “Sourcing Investments & Adding Value” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.



LPEJ Q1 2014: Jamestown Latin America

The Inflow of Intellectual Capital to Colombia Philip Fitzgerald CEO, Jamestown Latin America

1. Give us a brief background on Jamestown Latin America.

PF: Jamestown Latin America is a new

entity under the umbrella of Jamestown LP, which has been in business for over 30 years, raising capital from German retail investors and, more recently, global institutional investors, investing in the US. We started Jamestown Latin America nine months ago. Even though we’re a start-up entity, we are not a start-up team. My team from my last company, Paladin Realty Partners, where I ran the international business, joined me at this new venture.

2. What is your firm’s philosophy and how do you evaluate opportunities in Latin America?

PF: We formed the business based on a

couple basic principles. We first want to make sure we are local. We have an office in Bogotá and Rio de Janeiro. The office in Rio is headed by Axel Chaves, who has 30 years of experience in the real estate market in Brazil. The office in Bogota is run by Pablo Sala. Pablo and I made the first US-based institutional investment in real estate in Colombia and Peru – about six or seven years before people were thinking about it. Proprietary research is another area in which we are focused. We conduct our own research, headed by Brett Rosen, who has worked at Goldman Sachs, PIMCO and led Latin America research at Standard Charter Bank. When investing, I think people get caught


up in the headlines that might say GDP is growing by X amount or unemployment has gone down Y amount. Any one macro factor doesn’t mean there are good or bad real estate investment opportunities. The macro story is important but you invest in the micro story, whether it’s the city you’re choosing, or the corner of the city you’re choosing. So Brett’s role is to not only to help us make good investment decisions, but to also keep our investors informed beyond what the headlines are saying. His scope covers a broad variety of topics, whether that’s infrastructure development in Rio or a free trade agreement with Colombia. The last component of our philosophy is to have an alignment of interests with our investors and strong sponsorship. It’s a luxury to have our resources and balance sheet. Jamestown in the US is a fully integrated, full service development organization. While we aren’t acting as developers down here, we tap those resources to help us through the management process.

3. Are Colombia and Peru still your

area of focus? How has your approach to Latin America changed over the years?

PF: Before we started doing business

in Brazil in 1998, Latin America was a different marketplace. This was a market that had little or no access to mortgage financing to speak of. It was very expensive


and amortization terms were very short. Since then, amortizations extended from seven to 10 years and now mortgages look the same as they do in the US. The underwriting criteria in Latin America has been more strict than in the US, however. The introduction of consumer-oriented mortgage products has been a fundamental change. Another big change is that in the beginning we were one of the only US institutional investors in Brazil and now there are several. However, there is still no comparison compared to the number of institutional real estate players in the US or EU markets. As for Colombia and Peru – they weren’t on anyone’s radar 10 years ago. Colombia had security problems and Peru wasn’t that interesting, but now they have both gone through a transformation over the past 10 years. Peru has become more integrated in the global economy by rationalizing many of its economic policies, and it has a fairly low cost basis. It is a relatively poor country and needs everything. Even though Peru does not have the scale of a Brazil, a city like Lima, with approximately 8 million to 9 million people, has plenty of scale. We’re a city investor – not a country investor. There are also three or four other cities with opportunities in smaller scale development, probably in residential or neighborhood shopping centers. These are the two things we’re focused on right now: basic retail and residential, though not all types of residential in each place because each market is different.

LPEJ Q1 2014: Jamestown Latin America

In Colombia, we have the improved security conditions of course. But one of the biggest challenges we face is that when we tell people we’re in Colombia, they think we might be wearing flak jackets. Statistically speaking, Bogotá has a lower murder rate than Chicago. Maybe this isn’t saying much because Chicago has the highest murder rate in the United States, but I haven’t heard anyone completely refuse to go to Chicago because it’s dangerous.

stock of class-A is quite small compared to the population and economy, plus there are physical supply constraints because of the topography, so you have a very compelling case for office.

and construction loans are forbidden. I’m making up an extreme example, but that’s the challenge in such an environment.

5. What is our outlook for emerging

Turkey, what has been your experience with finding partners in Latin America?

Broadly speaking, we are targeting five countries: Brazil, Colombia, Peru, Chile and Mexico. All of these countries are investment grade sovereign credits, which as a starting point bodes well for their economic future.

long-term view of these markets, it’s hard to ignore the EM space from a real estate perspective. The challenge for anyone making a real estate investment is that it’s a local investment so there’s always a scale issue, and you need to execute. You have to start with basics such as, what is the rule of law? If you can’t make an investment in a rational manner, it doesn’t matter what the economy is doing.

Right now we’re not doing anything in Chile. It’s a fairly wealthy country and was the vanguard of economic and political reform in Latin America, but it’s a liquid market and there always seems to be more investment capital than good real estate opportunities. You also see Chileans exporting capital and business acumen to Peru and Colombia, which says something about those markets. We’re taking a wait and see approach to Mexico. It had some spectacular numbers leading into 2013 and now they’ve tailed off. Energy reform in Mexico is very compelling and improving security conditions are promising. From a real estate perspective, the question mark is one of valuation. A lot of liquidity has been generated locally as the pension fund industry has been liberalized and they’re now investing somewhat aggressively. I can’t tell you today if assets in Mexico are overvalued or undervalued.

4. What is your view on investing in

the office sector in Brazil and Colombia?

PF: We like office, but in São Paulo it’s

really soft. One of the things that some people are saying is that they will take advantage of distress in the office sector in São Paulo or Rio. The problem with that is there isn’t much leverage on those assets so the owners are more likely to just wait for better days. On the other hand, look at Bogotá and there is a much different story. The effective vacancy rate in Bogotá is about 1 percent and there are very few places where you can develop a new product. The

markets real estate in light of account deficits in certain countries?

PF: If you have any kind of medium to

Somebody once asked me, what kind of return would you need to look at an investment in Venezuela? My answer was: “It doesn’t matter.” The downside risk is so high that there can never be an upside high enough to make that bet. If you look at EM, I think Turkey is still interesting, although there always seems to be the backdrop of political noise. The other challenge is finding local partners and structuring partnerships. They don’t have a culture of partnering like they do in Latin America. Africa is very compelling but you really have to take a long view. The long-term demographics, along with the increased emphasis and access to education, will make for an interesting market. Throughout Africa there is a dearth of quality real estate products. They truly need just about everything, except for parts of South Africa. For example, there are cities of 4 million or 5 million people and there is no formal retail anywhere. There are challenges, of course, not the least of which are rule of law and property rights, which can be vague. Different pockets of Asia are interesting, though I am concerned about China. We have never made an investment in China because things happen by fiat and often without much advance notice. One day you think you have access to mortgage capital and the next day someone signs a decree

6. Speaking about finding partners in PF: We’ve found great partners in the

region. I’d compare any of the development partners we’ve had with anybody in the United States. They’re very professional, entrepreneurial, innovative, smart and really in tune with their market. This is what you want in a partner. They’re willing to align interests with capital as well. I had an office in Istanbul for three years and so often the mentality of the developers in Turkey was that of a trader rather than a partner. So I’m very pleased with the opportunity set in Latin America. One of the more compelling factors in Colombia is that we have a generation of professionals who went to the US 10 or 20 years ago and are now coming back to Colombia in light of the improved situation. It sounds kind of hokey, but they’ve come to reclaim their country. We see a lot of Colombians who have moved back to Bogota and Medellin who are very proud of their country and want to do things that are innovative and lasting. There is human capital in Colombia’s major cities that might be lacking in other markets.

7. What advantages have you found attending Latin Markets’ events?

PF: I think the events are fantastic. It’s a

great opportunity to network with likeminded professionals in the industry. We’re happy to have LPs in attendance and to see what they’re thinking about. It’s always good to hear from those at the forefront of the market. The first GP Executive panel at the event in São Paulo was enlightening. There are few opportunities to get that much thought leadership on one stage at one time. Mr. Fitzgerald’s colleague Axel Chaves, Managing Director and Head of Brazil for Jamestown Latin America, spoke on the panel “Real Estate Private Equity in Latin America” at the 5th Annual Private Equity Brazil Forum in São Paulo on December 9-10.



Why Auto Group Brazil is Looking to the Andean Marshall Cogan Executive Chairman, Auto Group Brazil

1. First begin with a brief background on Camargue Capital Partners and your experience working with them.

MC: Camargue Capital is a group of young

men who formed a boutique merchant banking and advisory firm about two years ago. They have five partners and the lead partner is Fernando Hormain. Everyone else has a role to play legally and in asset management. They have an extraordinary group and have delivered Auto Group Brazil clients we could never get to.

2. Where is Camargue focused in Latin America?

MC: They are focused on advisory services to mid-cap companies between $2 million and $100 million. Their network of relationships and institutions is focused in Brazil.

3. Is your company, Auto Group Brazil, looking to invest outside of Brazil?

MC: We have explained to them if we are

successful in Brazil we’d look at Peru and Colombia. Both of those societies are more stable than somewhere like Venezuela, Ecuador and Chile.

4. Which opportunities are you looking at in Colombia and Peru?

MC: I want to look at the high end automobile business, whether it’s Mercedes, Land Rover, BMW or Porsche.

5. When are you interested in focusing on Colombia and Peru?

MC: Once we’ve achieved 6 billion Reais in

Brazil I’d look to Colombia and Peru. Once we raise the money, we will be at 2.5 billion Reais by March 2014.

6. Why do you find the high-end

automobile market in Latin America advantageous right now?

8. What advantages do you find attending Latin Markets’ events?

MC: I thought the event in São Paulo was

market because the competition on price is too great. You don’t make money on selling the car. You make money on selling service, parts, restored cars and on the financial products. I don’t want to have Fiat, Volvo, GM or Ford. I only want to have the high-end.

most constructive. My orientation is that of a private equity entrepreneur. The people who spoke before us talked about allocation of assets and this is more a mathematical algorithm. I talked about how to run and fix a business and why Brazil makes sense for AGB now. What do we see that’s different now than in 1980 in Brazil? I believe now is the time to enter Brazil for high-end automobiles.

7. What are your thoughts on the state

Mr. Cogan was interviewed on “Opportunities

MC: I don’t want to deal with the lower tier

of emerging markets investing right now?

MC: The emerging market phenomenon has

broken down. Brazil has gone through hard times and Russia has had a different problem.


The fear of government takeover is so great. India hasn’t lived up to its expectation primarily because of corruption in the legal system. China in my opinion continues to do well even though growth has slowed. When you’re growing at 7 percent on 1.3 billion people it is still impressive. The environment, air quality and the water are going to stop China’s growth dramatically. This is going to affect every country in the world. They have a level of smog and fog that is at the window level in the car.


in Brazilian Private Equity Investing” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.

Latin Markets presents Latin Private Equity Journal (LPEJ), a weekly newsletter and quarterly magazine featuring interviews with LPs, GPs, government officials and private equity investors active in Latin America. Our team spends a significant amount of time traveling the world to meet with investors allocating to Latin America and Latin American investors allocating globally. LPEJ is designed to help connect our everyday travels with those of you who can’t always join us on the road!


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An Overview of the Private Equity Ecosystem in Brazil Claudio Furtado Executive Director, GVCEPE in all that it takes to negotiate a deal with venture capitalists. The main purpose is educational but we´ve had a number of cases of winners who end up receiving VC investment.

1. Give us some background on GVcepe. CF: GVcepe was founded as a study center of a

leading business school FGV-EAESP in São Paulo, which was founded in 1954 by the Getulio Vargas Foundation. Its parent institution, GVcepe, is the only university level research center in private equity and venture capital in Brazil. We were established in July 2003 with the support of leading GPs and I have led the Center since then. The industry started to pick up momentum in 1998 and 1999 and we decided to create a course in private equity for advanced undergraduate students. The curriculum was based on what was taught at Harvard, Chicago and Wharton MBA programs. With the help of students, FGV-EAESP faculty and industry leaders, the Center has been responsible for conducting the most extensive studies of the private equity and venture capital industry since inception. These are the two Census of the Industry 2005, 2009. The initiative of teaching and preparing human capital for the industry has evolved over time. We now have a very large number of students in almost every private equity and venture capital organization in the country. At the Center we also run a countywide program every year to educate entrepreneurs to receive venture capital investments. It is called Desafio Brasil (the Brazil Challenge), a program set up in partnership with Intel and the Lester Center at UC Berkeley. It has been sponsored by corporations like Intel, Visa and the Telefonica Group and to a lesser extent, governmental agencies devoted to innovation and entrepreneurship. The Challenge is about educating entrepreneurs through experiential learning. The objective of the program is to mentor start up entrepreneurs


2. Can you give us a brief primer of the

methodology and findings in the overview and the census?

CF: Our census is a major study of the industry

completed every five years. The next is scheduled for launch in November 2014 and should be concluded by June/July 2015. The Overviews of the Private Equity Ecosystem are annual updates. The current release covers 2010 to 2012. We announced the start of the research for the current edition at your forum in São Paulo in 2012. We then came back with the job completed in 2013 to share some of its important findings. Under a strict confidentiality agreement, the Center research team obtained data directly from 120 private managing organizations (GPs) and 285 investment vehicles (PE funds managed by public sector entities received close attention). The FGV-EAESP data bank includes relevant information on the organization, including the funds’ legal structure, investment theses, sector and stage of investment focus, investor profiles, and committed capital to Brazil, AUM, NAV and fundraising activities. There are also investments, exit flows and major technologies portfolio companies develop and use. Deal flow and future fundraising prospects are other types of information acquired. Rate of return data at the fund level were most difficult to obtain, but by extending our examination to CVM’s data (the Brazilian equivalent of the SEC) our researchers have been able to complete a broad study of the performance of this asset class for the first time completed in Brazil. Committed capital has jumped from $36 billion in 2009 to $58 billion in 2012, a 17 percent annual growth rate. Figures in BRL are 63.1 billion Reais and 119.2 billion Reais respectively. Public sector


investment activity by means of directly managed PE vehicles in major urban developments and infrastructure have boosted, funded by 14 percent of that committed capital in 2012, up from a timid 4 percent three years before. Overall, committed capital now reaches 2.74 percent of GDP, showing much room for growth to a projected 3.5 percent in three years considering the size and opportunities in the Brazilian economy as well as the maturity of the domestic PE industry. The overall size of funds has grown 60 percent since 2009, and 36 investment vehicles have sizes above $500 million, of which 11 are larger than $1 billion. The 10 larger managing organizations report an average size of $2.85 billion in committed capital. Private equity investment in that period averaged $7.6 billion per annum, reaching 0.34 percent of GDP (the US is close to 1 percent, and the UK is close to 0.9 percent) more than doubling the $3.2 billion average in 2008-2009. This is an extraordinary achievement because investment has remained stable for both years despite the financial crisis. By far, investments in real estate and infrastructure have dominated the scene with a sizable share of 21 percent each, followed by natural resources, and food and beverage at 6 percent each, and agribusiness and financial services come next with 3 percent each. Another big share of 28 percent includes several other sectors, an indication of the widespread penetration of PE in various segments of the economy by means of small and mid-sized portfolio investments. We have identified 723 portfolio companies, of which 39 percent are in the venture stage, 40 percent in the growth stage of PE, 14 percent in the PE later stage and 7 percent have gone public. This shows the growth oriented nature of the PE industry, in an environment where young and small to mid-size companies prevail and where value creation is a symptom of productivity and growth as opposed to gains from leverage. Important to note that portfolio companies are technology innovators as 51 percent of them report having developed the technology they use and 30.5 percent report having done research related to the technology they use.

LPEJ Q1 2014: GVCEPE Exit activity has concentrated on trade and secondary sales as IPO activity has practically ceased since 2010 (only four in the whole period as opposed to 19 in 2007). Performance data results are based both on CVM’s data and GVcepe’s proprietary database. In the former dataset average return was found to be a nominal 17.3 percent per year with a long-run alpha of 4.2 percent, using a Fama-French. In a much smaller sample, possibly containing self-reporting bias, IRRs over the 2010-2012 period averaged 23.1 percent per year. Median cash-on-cash multiples

improved cities, retail services, just to name a few. Some have changed as the government noticed that its intervention through regulation of say, concessions for infrastructure investment such as roads and airports, were a major impediment to private sector capital attraction. I do not believe in reducing private consumption but I do believe in reducing government consumption and expenditures. We could save at least 1.5 to 2 percent of GDP in escalating investment to 23 to 25 percent of GDP in order to sustain economic growth at 5 percent per year. As a consequence

“ There has been a major shift in the

funding of private equity and venture capital in Brazil. ” were 1.79 for the entire sample (PE&VC industry), 1.94 for private equity, 1.72 for venture capital and 1.29 for balanced funds, in that three year period. We have seen a lot of venture capital-only organizations appear in the past few years. Committed capital of VC-only funds grew 56 percent between 2010 and 2012. Balanced funds plus small PE funds (under $100 million) more than doubled in the same period. We have observed an increase of 60 percent in the number of funds small funds balanced and dedicated to VC since 2009, making investments in the order of $300 million per year.

3. Could you speak to the current

Brazilian economic context as it relates to an over-reliance on consumption and a shift toward domestic productivity and increased investment in infrastructure? How has private equity played a role in this?

CF: Domestic consumption is approximately 61

percent of GDP. It has been this for the past five years. You cannot make changes to this composition overnight. We currently have a large government sector which is about 19 percent of Brazilian GDP. The point is not to change the level of consumption but to raise the level of investment. We currently invest close to 19 percent of GDP and this includes private equity, which is less than 0.4 percent of total GDP. It’s 1 percent in the US and the UK. However this is growing and signals to the potential for additional PE investment in the economy, as widespread across sectors as it already is. The major issue is the investment in infrastructure, energy and the associated real estate investments that are necessary for logistics and urban mobility that accompany the growth and improved living conditions of the middle class in the cities. The private equity industry is a major player in all areas that respond to needs of a population that requires better education, health, housing, transportation,

I believe private capital is a major player in that investment process, not in the additional volume it brings, but in the types of investment it will select, for the technologies it will use, and the changes in business models of traditional sectors of economic activity (health care and education have been tremendous cases of success). It is very interesting finding that government agencies are utilizing the private equity model to co-invest jointly with the private sector in major projects in the energy sector, urban development, such as Porto Maravilha in Rio, road construction and concession, ports, airports, etc. On the other hand BNDES has also established two important funds (managed by private sector managers) to support the growth of tech based start-ups and this will be followed by Finep and state level development agencies introducing similar projects.

4. Where have you seen international

private equity plays coming into Brazil? How does private equity present an interesting opportunity now?

CF: There has been a major shift in the funding of

private equity and venture capital in Brazil. Domestic investors are now responsible for close to 65 percent of fundraising of the entire private equity industry. The relative portion of international private equity fundraising has decreased and this is an important trend. Pension funds, family offices and other institutional investors are looking to private equity as an important asset class. Pension funds in Brazil have plans to more than double their allocation to private equity in the next three years. Currently their total allocation amounts to 2.3 percent of their AUM to private equity. They want to increase to about 4.3 in three years and the four largest funds already plan on reaching 7 to 10 percent by 2020. Funding is not expected to be a major problem for growth of the industry, though competence of fund managers is. International PE organizations have become a major component of our landscape. Domestic managing organizations have seen funds increase by 60 percent

on average since 2009, and they already constitute more than 60 percent of those in the billion dollar club. The presence of international private equity institutions gives a signal that the private equity industry is open to foreign investing, that the business climate is favorable, that the government is friendly and will not subject them to exit restrictions. On the other hand we have a network of organizations that essentially promote best practices of private equity and venture capital investments. There is an inflow of qualified talent as well. We have seen a sizable entry of smaller funds which are about $50 million in committed capital. They are looking at innovative start-ups or small companies that are here to grow with the support of the lower end of the private equity value chain. Growth and maturity in this industry has been achieved by growing big businesses by investing when they were still small.

5. How have you seen the talent of GPs

increase over the years in private equity?

CF: The numbers in the industry speak for

themselves. But I have been placed in a privileged position for watching the inflow of talent in this industry as I teach bright undergrads who end up finding their way into the industry. I am happy not only with the type of talent but also to see the type of training they are receiving from top managers. This is a primrose path.

6. What advantages do you find

attending our Private Equity Forums?

CF: More insights will be gained as soon as we

publish our Overview of the Ecosystem Study. I think this is valuable material for managers, investors, domestic and foreign, regulators, entrepreneurs and for those mid-size companies that look for the right partner for growth and success. Your forums provide a great meeting point of talents from all over the world to meet and discuss the business environment, as well as opportunities and threats. I contributed reliable results from applied research work that has been created with a lot of passion and academic rigor. This is our tradition, and I am positive our work is one of the robust pillars of the private equity industry in this country. Mr. Furtado interviewed Marshall Cogan, Executive Chairman of Auto Group Brazil on “Opportunities in Brazilian Private Equity Investing” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.



Turnaround Investments in Brazil 1. Let’s begin with some background on AlpInvest and your role at the firm. What are your assets under management?

MH: AlpInvest is a global leader in the PE

investing space with over $45 billion AUM. We have over 80 investment professionals spread across primary, secondary and co-investments. I look after our fund investment activities in the Americas and sit on the firm’s global investment committee. Prior to joining AlpInvest 10 years ago, I was part of the fund investing team at Fleet Bank and also spent time with State Street Bank as a consultant to numerous institutional investors advising them on their PE investment activities.

2. What sectors and countries in Latin America are you currently investing in?

MH: We strive to build unique portfolios

for our investors by taking a top-down macro view of the region while proactively sourcing unique investment opportunities in the region. We have had meaningful exposures to Colombia, Peru, Chile, Mexico and Brazil for some time. More recently we have also seen some of our capital flowing into smaller economies like Uruguay and even Central America. The rise of the middle class, infrastructure and service providers, to commodity related plays have been very fruitful areas for us.

Marek Herchel Managing Director - AlpInvest Partners

LPEJ Q1 2014: AlpInvest Partners

3. What private equity strategies does your firm prefer?

MH: We have a strong preference for

local players as opposed to firms that parachute in to execute deals. Feet on the street are essential to differentiated deal flow in the region. While we are flexible, we like strategies that focus on controlling investments and exits, which we have learned is crucial in dealing with the inevitable fluctuations of these markets.

4. How do you go about evaluating opportunities in Latin America?

MH: Having invested in the region since

our inception, we have always focused on having as complete a picture of the opportunities available to us as possible. We evaluate the opportunities based on the same key criteria as we do in developed markets – team, strategy and track record. We have built a strong local network in the region to facilitate a deep diligence process in line with the quality seen in the developed markets.

5. What has been your experience with due diligence in the region?

MH: Overall, the market is certainly getting

more institutionalized and intermediated, the upside of which is greater transparency and availability of information. As mentioned, we have built a deep network of LPs, GPs, CEOs and intermediaries to enable us to conduct a high quality diligence process. We also use external advisors to address specific items as a part of our DD process.

6. What is your take on the quality of managers you’ve found?

MH: This has also improved significantly

over the years. We have seen a number of local managers raise and successfully deploy their first funds over the past few years. They are now institutionalized and have a proof of concept that allows them to attract international investors. We expect this trend to continue.

“ We have a strong preference for

local players as opposed to firms that parachute in to execute deals.” 7. What are your thoughts on

investing in emerging markets in light of deficits in certain countries and trepidations related to Fed tapering?

MH: Clearly the current account trends

have caused some concerns among the investors in the region. Deficits in some countries (notably Brazil) raise concern as they need to be financed by capital inflows, which make these countries susceptible to sudden stops. Other countries in the region, where the pace of reforms has been more rapid and consistent, such as Colombia, Chile and Peru, seem to be better positioned. That said, the situation looks significantly better today than in the late 1990s: FX reserves are significantly higher, external debt/government debt is significantly lower, and exchange rates are more flexible. Market dislocations such as this due to re-pricing of risk give rise to investment opportunities for long-

term investors. The key will be for these countries to implement new structural reforms to maintain growth momentum, as they did in the early 2000s when they were forced to do so by a sequence of crises.

8. What is your outlook for Latin

America in the coming years and which areas would you like to focus on?

MH: We are a long-term investor and

excited to see our existing portfolio in the region doing well. We continue to add LMM exposure in the region, and have looked at VC as well. We see some specific market opportunities such as turnaround investments in Brazil for example. I think Venezuela remains a wild card and would clearly represent a huge market opportunity were it to open up.



Where are Mexican Reforms Leading to PE Opportunities?

Steven Costabile Managing Director and Global Head of the Private Funds Group

PineBridge Investments

1. Give us a brief background on PineBridge.

2. How did your firm go about making its first investments in Latin America?

SC: Because we run a global platform

SC: PineBridge currently manages about

$73.5 billion in assets (as of December 31, 2013) across equities, fixed income and alternatives. We manage $16 billion in alternatives. I’m in a sub-set of the alternatives group and Head of the Private Funds Group within PineBridge. We manage approximately $7 billion of the $16 billion on behalf of PineBridge. Across the firm, we’re very active in equities in both developed and emerging markets. We’re also extremely active in fixed income, leveraged loans and high yield. In alternatives, we’re also active in both developed and emerging markets in direct and co-investment deals. I oversee multi-manager vehicles that we put together globally which invest in private equity, credit and secondaries.


One prevailing theme of PineBridge is our emerging markets and global focus. When you look at our investments across the firm, we employ high value add, less commoditized strategies. As a firm we are focused on high-impact investments across all strategies we pursue.

executing different PE strategies around the world, we’re always looking to extend our client base and utilize the firm’s strength, whether through historical strategies or personnel. In the mid-1990s, I executed private equity strategies for two state pension funds: Pennsylvania and Massachusetts. I always followed the development of Latin America and the upsand-downs of private equity formation in that market. I then started developing a view that after China, Latin America was going to be the next emerging growth platform. When you look at the demographics in the region, you see that, in the mid-2000s, pension funds and the regulatory regimes, led by Chile, were starting to be more open-minded and embrace alternatives. Their pension funds were much like the


superannuation model in Australia, where it’s compulsory to be involved in a pension and you can choose a pension run by the government or a private provider. Many of the regulatory regimes in these countries started to be more open minded about diversification, so we developed the mindset that this would be an interesting place to develop our global products. We started developing vehicles for our global clients to start investing in Latin America. One of our senior business development professionals was of Peruvian descent, so he had knowledge of the market and we ended up starting the platform in Peru. We decided to focus on the Peruvian market because the demographics were great and the regulatory regime was opening up. In 2008, we were the first private equity fund of funds ever to be approved by Peruvian regulators. We started developing relationships and leveraging our public equities office in Santiago and this helped develop perspective and context. Having the foundation of also developing relationships in Peru, we developed a Latin American viewpoint and an understanding of where we should take our clients. On a pan-Latin American basis, we decided to look at the Andean countries:

LPEJ Q1 2014: PineBridge Investments

Peru, Chile and Colombia. They were cooperating more on a macro basis and their markets were coming together. We obviously knew Brazil well but we chose to weight Brazil lower in our market mapping than the capital formation and private equity markets were dictating. If you looked at capital formation last year, this would indicate that Brazil should be perhaps as much as 75 percent of your weighting. As we think about market mapping, we’ve determined that Brazil should be no more than 45 percent and that the balance should be Chile, Peru, Colombia and Mexico. Our worldview for Latin America is more focused on small, mid-market, buyout and growth as opposed to the funds that are being used as a proxy for the region. There are a number of funds which raised a significant amount of capital and investors simply said I’ll just commit to this fund and that will be my Latin America exposure. We think this will not be as optimal as having a truly built-in allocation across the market in the small to mid-market space.

3. You mentioned Mexico as one of your countries of interest. How have some of the recent reforms in the pension system and economy influenced your investments there?

SC: In 2010, as we were building these

relationships across Latin America, we had always been interested in Mexico and got to know the pension system. In 2010, the Mexican regulatory body started to catch up to Chile, Peru and Colombia. Mexico allowed the pensions to invest in private equity for the first time. The first caveat was that they could only invest in Mexican private equity which reminded me of my days with the US pension funds when they had their in-state initiatives. The second requirement was that the vehicle they invested in had to be publicly listed on the exchange so it could be regulated by the Mexican equivalent of the SEC. At first, we thought these factors were not the most optimal, but as we got to know the Mexican opportunity set we found there was more depth than we had realized, concerning the availability of appropriate skill-sets to build a proper portfolio. So we said to one of the Mexican pension

funds, “If we take a vehicle and publicly list ourselves, then the entire Mexican opportunity set is open to us, rather than relying on each underlying fund to publicly list.” We were able to raise capital and at the end of the process the Mexican government began looking at seriously deregulating energy, telecoms and media, so our timing couldn’t have been better. We think this will be the largest economy in Latin America by 2020. It’s obviously the most industrialized right now. In the future we think there are opportunities in Mexican credit. The availability of credit for small

“ There is an

expanding opportunity set in Mexican financial services.. . ” and mid-market businesses is very limited now and the formation of private market credit is almost immeasurable. There’s an opportunity to fill inefficiency in an area where you can be disproportionately rewarded for supplying capital into a void. This is what we learned in the developed markets from our multi-manager credit vehicles in the US and Europe right after the financial crisis when traditional lenders stepped back.

4. Which sectors in Mexico and the

private market companies operating in the same industries, and then hopefully take advantage of those prevailing multiples. There is an expanding opportunity set in Mexican financial services, industrials and what we believe are companies that will be spun off, especially with this deregulation period in energy, media and telecoms. We love being in the consumer durable space in Mexico, or anything that is providing for the consumer. We are also thinking about regional plays in consumer products which are appealing to larger strategics gaining entry into the region. Outside of Mexico, in Colombia, Peru and Chile, the deal sizes aren’t that large so, for these very large funds which have the benefit of being named as a proxy for the region, a lot of them are dealing in Brazil where valuations are richer, but the opportunities are bigger and can absorb more capital. If you’re looking for deals of $75 million to $100 million in Colombia – there just aren’t any. In these countries we’re looking at consolidation as smaller businesses get acquired by a platform so they can be more appealing to regional and some of these larger buyout funds. We don’t mind if our managers sell to strategics or do a secondary sale upstream to larger funds. Family businesses as well represent opportunities for private equity investment. Taking a minority interest or ultimately taking control of a family business where there isn’t a next generation that will run it, represents another opportunity. These businesses represent a good platform for additional consolidation of similar businesses.

Andean region have you invested in given that the markets are not as developed for private equity investments?

5. What advantages have you found

SC: A lot of our knowledge and perspective

spirits where everyone is speaking the same language of private equity and understands how the opportunity set is coming together and can communicate – it really helps to cut to the chase and dive deeper into issues. At your conferences, you’re able to hit a lot of critical considerations in the region, spanning a broad base of topics and issues. Anyone serious about looking at Latin America needs to be in that type of construct to get the full breadth and scope of everything that’s happening in the region.

attending Latin Markets’ events?

SC: Any time you’re in a group of kindred

on sectors is layered by the expertise of our public equity group. They have certainly developed a point of view on the macro public markets and which industries and sectors are doing well. Many times, from the public side, there is so much activity that the valuations can become frothy. On the private side, this gives us a chance to use skill-sets and managers to give us an arbitrage on what’s happening in the public markets by gaining entry into the



LPEJ Q1 2014: Commonfund

Commonfund Making Up To Three Commitments to Latin America in 2014 David Jensen Associate Director

Through our knowledge sharing, education programs and research, we continue to promote best practices among institutional investors.


2. How much of your portfolio is

1. Give us some background on

DJ: While we take macro factors into


DJ: Commonfund was formed in 1971

to help university endowments enhance their financial resources and improve their investment management practices. As a private, nonprofit organization, we are beholden to our clients, not to shareholders or outside owners enabling strong alignment of interest. Today, Commonfund manages nearly $25 billion for almost 1,500 clients comprised of nonprofit institutions, pension funds, and other leading institutional investors. Commonfund Capital was formed in the late 1980s to add private capital capabilities to the Commonfund organization, and today our goal is to provide the best total solution for global private equity, venture capital and natural resources investing. We build private capital portfolios across these three strategies in both funds and separate/ managed accounts comprised of primaries, secondaries and co-investments. We have a global footprint with offices in Beijing, London, San Francisco and Wilton, CT.

currently allocated to Latin America and emerging markets?

consideration, our investment decisions are more micro-driven. We’re pretty flexible since we don’t have to meet fixed geographic allocations. Instead, we’re more focused on identifying and executing the best risk-adjusted investment opportunities. That said, roughly 50 percent of our capital is invested in the US and the other 50 percent is non-US. In that international bucket outside of Asia, about 15 percent is invested in Latin America which we consider a feature geography in our emerging markets strategy. We are currently deploying around 30 percent of our emerging markets capital in Latin America and are targeting this approximate percentage going forward. We also focus on other geographies including China, India, Southeast Asia, South Korea, Africa, Central and Eastern Europe and other select regions. Across each of these areas, we invest with managers that tend to pursue high domestic consumption growth potential and capitalize on favorable demographic trends.

3. How many allocations have you made to Latin America?

DJ: Since the 1990s we have partnered with

seven different private equity managers and committed capital to many different funds. Commonfund is very active in Latin America today investing in both panregional and country-focused funds on a primary and secondary basis. We will also selectively co-invest alongside our managers maintaining a strong focus on downside protection. Going forward, we will have more capital dedicated to the emerging markets which will facilitate greater Latin America diversification, shots on goal, and flexibility to partner incrementally with more country-specific managers that can be more local and connected than pan-regional managers.

4. What is the typical size of an allocation you make to a fund?

DJ: In Latin American fund partnerships,

we’re pretty flexible, typically investing between $5 million and $20 million. Our sizing can vary more with opportunistic co-investments and secondaries in the region depending on deal dynamics and the risk-return profile of the opportunity. Our custom account clients have varying bite sizes and appetites.

5. Which sectors and countries have

you been focused on in Latin America?

DJ: In Latin America, we focus on six

countries: Mexico, Brazil, Chile, Colombia, Peru and Uruguay. The size of the middle class in these countries has grown considerably in the last 10 years along with per capita income levels. This trend has led to increased purchasing power by the middle class, stronger consumer spending, and greater domestic consumption. Our managers generally focus on companies, products, and services that stand to benefit from these trends and that experience growth rates well north of GDP. Some of these sectors include health care, logistics, consumer and education. There are also some interesting opportunities connected to the infrastructure improvement theme in Latin America.

6. What has been your due diligence experience in Latin America?



LPEJ Q1 2014: Commonfund

DJ: Our emerging markets investment

experience, which dates back to 1994, has taught us that a successful program must be based on vigorous country-by-country due diligence to determine the quality of managers, exit markets, legal sophistication and financial transparency. Over the years we’ve developed a strong conviction that long-term returns in emerging markets are driven primarily by four key factors: a strong growth environment, high quality private capital managers whose interests are aligned with investors, viable exit markets and the presence of a sophisticated legal and financial regulatory environment. We believe these four key factors exist across certain pockets, countries and industries in Latin America. There are no shortcuts when it comes to understanding the landscape and framework in Latin America, thus we’re regularly in the region visiting companies and meeting with managers, entrepreneurs, and financial service providers. We always seek to partner with locals who are deeply embedded in the local business networks and are very accustomed to local business practices and culture. Relative to the US and Europe, it’s a much more narrow band of institutional funds, but the talent in the region is impressive. Our existing Latin American managers have demonstrated the quality and depth of their work, high ethical standards, and realized proof points in line with the developed market managers with whom we’ve partnered.

who has aligned him or herself through rolling over significant equity. Our main focus in Latin America is on growth investments in the middle to lower mid-market via primary, secondary and co-investments. Several global private equity firms have established a presence and have become more active in Latin America, which we believe has increased purchase price multiples at the larger end of the market. In addition to better general pricing, it seems that mid to lower midmarket companies often haven’t taken on institutional capital before and thus tend to have more value creation opportunities available. These are often quite straight forward and can translate into enhanced earnings, increased profitability, multiple expansion and better overall investment outcomes.

8. What is your timeline for making

additional allocations to Latin America?

DJ: We’re always on the lookout for

compelling new fund opportunities in Latin America. Also, some of our existing managers will launch their next funds in 2014 so we could make as many as three commitments this year. We’re also opportunistically pursuing secondaries and co-investments in an effort to average down our investors’ fees and mitigate the J-Curve for our clients.

9. Could you discuss further your

7. What type of private equity

strategies do you employ in the region?

view on control versus minority investments, as you covered on your panel at the Private Equity Brazil Forum in December?

DJ: We’ve found that both control and

DJ: Ultimately, there are pros and cons to

minority oriented managers can generate attractive returns, but our general preference in Latin America has been toward control with almost all of our managers having a control orientation. Control managers tend to have a greater ability to make changes in operations, strategy and exit timing. That said, in exchange for not taking control, minority investors can often obtain more attractive valuations, have access to a broader universe of investible platform companies, and can help protect downside through purchasing a senior or structured security. We believe the key to successful minority deals is partnering with a very motivated, laser-focused founder or CEO

each and it depends on which makes more sense for the situation. Having control can be nice if you’re trying to do things that are transformative to the company, but you typically have to pay a premium to get control. A lot of families and entrepreneurs may not be willing to sell control, so if you are willing to buy a minority stake it can open up a broader universe of investible opportunities. Trust and alignment with the founder and/or the controlling shareholder is even more paramount in minority investments. Structuring your minority investment can help protect you in some cases if the person in control decides to do something different than they proposed pre-

closing. Structuring can be accomplished in a variety of ways but one frequent method is to purchase preferred securities or a senior debt instrument instead of common equity. Overall, we’re agnostic when it comes to control versus minority, although we do tend to feel a little more comfortable with control-oriented managers in Latin America given the incremental risks in emerging markets and inherent volatility. We still make investments with minority managers though too and, in fact, almost all of our Asian managers are minority and growth equity investors. We believe the reason for this has to do with how young most of the Asian companies are relative to companies in Latin America and developed markets. Asian companies often are experiencing high existing growth rates and the Asian entrepreneurs/owners often want to maintain control as they work toward what they believe will be an even larger exit. At times they appear to be influenced by their friends and industry peers who may have taken their company public or sold to a strategic for a relatively higher multiple.

10. What are the advantages of attending Latin Markets’ events?

DJ: We’ve attended a number of Latin

Markets events over the last few years and found them to be productive and very well attended by both local and international investors as well as institutions and public policy leaders. We think bringing together these different groups and individuals helps facilitate important discussions on pressing issues and opportunities in Latin America that ultimately help our industry continue to progress and move in the right direction. The panels are always insightful, and we can get a lot done from a due diligence and networking standpoint in a one to two day period, which makes these events very worthwhile to us. Mr. Jensen spoke on the panel, “Minority vs. Control Investments” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.



LPEJ Q1 2014: Avanz Capital

Africa, China and Agribusiness in

LATIN AMERICA Haydee Celaya Co-Founder & CIO

Avanz Capital

1. Give us a brief background on Avanz Capital.

HC: Avanz Capital was established in

2010. The firm was founded by me and my colleague Hany Assaad. We were both at the International Finance Corporation for many years and as a result we have a lot of experience in Latin America and the broader emerging markets. I was in charge of the Global Private Equity Funds Group at IFC during my last six years there and was Chairman of the Funds Investment Committee. Hany was co-CIO in the Funds Group. Avanz only invests and specializes in emerging and frontier emerging markets with a focus on private equity. We use a hybrid model by investing in primary and secondary funds and direct co-investments across a number of geographies. Not many managers have teams or individuals with long track records operating in multiple


geographies, but we do, so we can handle this geographic scope. We made our first commitment to a China health care fund and as we speak we are selecting our next two investments. On our shortlist we have funds in Africa and Latin America. We’ll see whether the next investment comes out in Africa or Latin America.

2. Why are Africa, Latin America and

emerging Asia markets areas of interest for you?

HC: We like these three regions for a

number of reasons, but primarily because we believe diversification is a good strategy when investing in emerging markets. There’s the whole story about the growing middle class and growing consumer base, of course. But, when you look at different regions they are at different stages of economic development and regional integration. The private equity industry is at a different stage of development as well.


And when it comes to sector diversification there are industry sectors that are interesting in one region but not in another, so if I want exposure across multiple industries, geographies, strategies and vintage years, it’s a good idea to diversify across different regions. For example, agribusiness is an industry we especially like in Latin America, while financial services are interesting in Africa. We are also looking at supporting cross regional investment opportunities. You have Brazilian companies now looking for opportunities in Africa, so we would be well positioned to work with a portfolio company or GP in Latin America that might see an opportunity in Africa, and since we know Africa we can work across borders.

3. Are you interested in taking a panregional approach in Latin America?

HC: We’ve invested across all sectors whether

it was oil & gas, financial services, agribusiness, etc. When you look at private equity in Latin America there are five countries where it works particularly well: Brazil, Mexico, Peru, Colombia and Chile to a lesser extent in private equity. Most people have focused historically on Brazil and Mexico. It’s similar in Africa as everyone looks at South Africa and Nigeria because they’re the largest economies, but there are a lot of interesting things happening across the continent. We’re looking at Brazil and Mexico because they are large enough to sustain a country or sector specific fund, but we are also looking at the players who are building regional firms. In terms of sectors, agribusiness is interesting as well as health care and education. We’re focusing on the mid-market and not the multibillion dollar companies.

LPEJ Q1 2014: Avanz Capital

4. What size allocation would you like to make in the mid-market?

HC: In terms of fund investments, our

average ticket size is around $20 million. We have a direct co-investment program and there we have an average ticket size of $10 million. We have a bigger range but this is our sweet spot.

5. What type of managers are you

Even though we would be one step removed from these portfolio companies, we can engage and assist fund managers in these particular industries because we are also investing in a similar space in other geographies. We can bring our global experience in specific sectors as we review and monitor our investments.

6. What are your thoughts on the

fundamental changes that are occurring in the countries and industries in which you’re investing. Investors that are deploying capital globally are exposed to volatility and this has a secondary effect on their private equity portfolios. We have to be mindful of that, but with private equity you need to have a long-term view. We think there is a great opportunity for the long-term in emerging markets that you don’t want to miss.

looking to invest with in Latin America?

state of emerging markets investing right now?

HC: As I mentioned, I have experience from

HC: Part of the reason I think

attending Latin Markets’ Private Equity Forums?

the IFC days and began investing in these markets in the ‘90s. We had a lot of lessons learned from those days. When we started investing in the last decade we were able to make better selections.

From the Avanz perspective and having our own personal experience, we’re looking for the mid-sized funds. We are looking for

diversification is a good idea across multiple regions is because you have to anticipate these cycles. In my experience I have gone through many financial crises and cycles. The IFC was counter cyclical in its investment approach and I am a firm believer in that. When everyone is running into one country and writing very big checks, you better beware. This is the best time to start looking somewhere else. You

“ Agribusiness is an industry we especially like in Latin America ” fund managers who are able to work with companies and bring them more than just a bit of a capital. With or without control, these managers are partners with these businesses.

7. What advantages have you found HC: These conferences are great for

networking. Getting re-connected and networking with GPs and LPs is very important for me. I spent the whole week in Brazil. I would like to thank Latin Markets for the opportunity to participate in the event. Ms. Celaya spoke on the panel, “Private Timberland Investments” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.

also have to understand the fundamentals of the country. Private equity is a long-term business so minding short term cycles is important, but this isn’t what drives your investment position. You have to look at the



LPEJ Q1 2014: Morgan Stanley Alternative Investment Partners

Industrial, Office and Retail Real Estate in Mexico David Boyle Managing Director

Morgan Stanley AIP

1. Give us some background on Morgan Stanley AIP.

DB: Alternative Investment Partners is the

fund of funds business for Morgan Stanley. We manage private equity, hedge and real estate. My team manages about $1 billion globally. We invest in best in class multimid-size funds and the secondary markets, buying secondary stakes from LPs. We also co-invest directly in deals with our managers.

2. How is your portfolio broken out by developed and emerging markets?

DB: In the developed markets we have

about 75 percent exposure and 25 percent in emerging markets. Latin America is about 15 percent of our overall exposure.

3. Which countries are you focused on in Latin America?


DB: We’ve invested in Brazil over the past

few years and are in the process of realizing some of the investments we’ve made. We’re not currently putting capital to work, though we are looking at select opportunities in hospitality. We’re more skeptical of office, industrial and retail at the moment. We’d normally look to gain exposure in office, logistics and home building, but there’s a lot of supply particularly on the office building side in São Paulo. Rio de Janeiro is a little more interesting from an office building perspective, but we think there is too much development. In Mexico we haven’t invested yet but are very interested right now in industrial, office and some retail. Our philosophy is to focus on major markets wherever we are investing. It’s very rare that we go into a secondary market.

4. Could you speak more to your

comment on the hospitality sector?

DB: It’s not a core focus of ours but we think

the dynamics are interesting in Rio and São Paulo because they have been historically undersupplied in that area. A lot of that is driven by land value. It is a great opportunity if you can get the right piece of land and bring in an international global branded hotel in the right market or sub-market.


But that is more of a rifle shot for us if we see a really interesting opportunity on the right basis.

5. How do you see opportunities

evolving in Brazil given current capital flows?

DB: A lot of the inflow is domestic right now

as opposed to global inflow. The Real has depreciated a lot over the past six to nine months so a lot of capital is leaving. Bond yields have come down too. It used to be that domestic sources would just hold bond yields, but now they’re looking for higher yields and real estate can provide just that, as well as an attractive exit. In Brazil we focus on the opportunistic side of the investment, so we’re focusing on development. When we stabilize the commercial asset we want to sell it on to the local source of demand. We think Brazil is a healthy environment from an equity perspective.

6. How do you see economic dynamics

between emerging and developing markets playing out in the years to come?

DB: You’ve seen some of the devaluation in

Brazil and what’s going on in India and China,

LPEJ Q1 2014: Morgan Stanley Alternative Investment Partners

“ Given Mexico’s macroeconomic recovery

and the president’s reforms, it has made investing there more interesting for us.”

so investors are taking pause. The money that’s coming in and going out is the hotter money. There’s still substantial interest investing in real estate private equity in emerging markets coming from institutions like pension funds, insurance companies, endowments and foundations. We think in the long-term the fundamentals are sound. Some of this was a necessary rebalancing because some of the emerging markets benefitted from the inexpensive money that was in the system. There are also of course issues related to the Fed’s eventual tapering, and internal problems within certain countries that have come to the fore. But overall we are big believers in the middle to long-term growth story. You have to be careful when you time your entry and exit because there can be more volatility than developed markets. In the longerterm it makes sense to have a significant portion, or what we have, which is about 25

to 30 percent of our portfolio in emerging markets and Latin America.

7. What property types are you

we hadn’t paid much attention to Mexico because we invest with fund managers and there aren’t as many fund managers as there are in Brazil. In Brazil we could invest with a dozen fund managers and still be investing with very talented groups, whereas in Mexico that’s not that case. It’s been harder to find that talent in Mexico. We feel like there are some interesting groups that are emerging now; some on the logistics and office side.

8. What advantages have you found

researching in Mexico?

attending Latin Markets’ events?

DB: We haven’t invested in Mexico

to date but we have spent a significant amount of time doing research. We recently took a trip there last year to meet different players in the country. Given Mexico’s macroeconomic recovery and the president’s reforms, it has made investing there more interesting for us. There are also of course the local markets. We look at major markets but also places where we see good liquidity and exit. Now you see the Mexican pension funds starting to put local money into the real estate market in a big way.

DB: I was a speaker at the real estate

conference in New York last June. It was a great panel with my fellow fund of funds and an interesting discussion. Mr. Boyle spoke on the panel, “Multi-Manager Executive Perspective” at the Real Estate Latin America Forum on June 10-11, 2013.

The Mexican versions of REITS, or Fibras, have also become successful. In the past



LPEJ Q1 2014: Unigestion

Capturing the Micro through Pan-Regional Federico Schiffrin Investment Director - Private Assets


1. Give us a brief background on your role at Unigestion.

FS: Unigestion is a privately-held,

independent asset manager. We manage approximately $15 billion across our four investment lines: Cross Asset Solutions, Equities, Hedge Funds and Private Assets, as of Dec. 31, 2013. Established in 1971 and headquartered in Geneva, Unigestion has offices in major financial centers around the world: Zurich, London, Paris, Guernsey, New York, Toronto and Singapore. About $3 billion of the $15 billion is dedicated to private assets. About 80 percent of our private equity is invested in developed markets in the US and Europe. The other 20 percent is allocated to emerging markets. Our exposure to emerging markets is mainly through funds in Asia, but we are increasingly looking at opportunities in Latin America. We’ve historically invested mainly through fund structures, but over the last two to three


years this has started to shift. Leveraging our 15 years of experience in US and European secondaries, we are now actively pursuing secondary transactions in Asia and Latin America. We also have a co-investment/ direct investment practice which is growing as a percentage of the capital that we deploy. In that vein, a large part of the capital we’re going to deploy this year in the US and possibly Latin America is co-investment capital.

percent of our assets are from clients in Switzerland, France, the UK and Ireland and Germany, with the remainder coming from our growing activities in the Nordics, Canada and the Benelux countries.

Unigestion was an early investor in Latin America in the late 1990s – an experience which was not all that positive. From that experience, we learned a lot about political and macroeconomic risks. The lessons learned during that period certainly help us to navigate the current similarly complex global environment.

interesting in Latin America are countries where there is a supply and demand imbalance of capital in a diverse set of industries. Today, we have exposure to Mexico and Brazil. Going forward, we are focusing on pan-regional investments because there are different micro trends in each country where there is a supply and demand imbalance, and we think they are better captured with a pan-regional focus. For example, Brazil is more advanced on the financial services side while Peru is less advanced. On a pan-regional basis, you can address this supply and demand imbalance, shifting resources on a per country basis. From a risk-reward standpoint this makes more sense for us and our investors. That being said, we are overall an opportunistic investor and actively search for niche opportunities. For example, we think the logistics market in Brazil is interesting because you have a lot of soy bean and iron ore production that needs to be shipped, and the infrastructure today is lacking. We have thus looked at several offerings in the

I joined the firm in 2009 to focus on the US and to increase our investment reach in Latin America. Over the last few years we have been increasingly active on the conference circuit in Latin America and have attended your conferences in Brazil and other countries. From my perspective, they have proven very useful for dealsourcing and strengthening relationships with GPs throughout the region.

2. What is the geographic makeup of your clients?

FS: We have nearly 250 clients. Nearly 90


3. Where have you invested recently

in Latin America? What approach have you taken?

FS: My view is that the areas that are

LPEJ Q1 2014: Unigestion

segment that address this opportunity. We might look at a middle-market investment in Brazil that is doing something niche or specific, or has a distinct advantage – for now though, that will be less of our focus. Lastly, we like turnaround and situations that take a bit of heavy lifting, but haven’t found a partner for that.

4. How much are you taking into

account some of the lower growth in Brazil? Are you seeing more opportunities from a private equity standpoint?

FS: There is still a big capital overhang

in Brazil and to me valuations haven’t fully adjusted to the macro and micro environment. It’s been more of a perspective shift. Fewer dollars may flow in because of the noise about Brazil, but the story of the middle class is to us still a real story – low growth or no low growth. Brazil has 200 million people. It’s a slow boat, but it moves forward. I’m less concerned about the macro and exchange rate issues. There are very interesting micro opportunities to address in Brazil. They’re not uncorrelated from GDP, but they grow faster than GDP.

5. You mentioned Mexico earlier. Which sectors have you focused on there?

FS: In Mexico, we have exposure to a

company in the data sector space. The interesting thing about Mexico is how necessary infrastructure is for such a growing economy. Energy generation is also very interesting because Mexico is break-even or short energy. If the country continues its current path of growth, there will be more demand for energy. There’s also a great opportunity in the oil & gas midstream sector. Energy will be produced locally, whether it’s shale or conventional, and while there is pipeline infrastructure in Mexico, there aren’t connections between the infrastructure and corporations who want the gas to manufacture goods – as has happened in the US. I’m not thinking about infrastructure-like returns, but there’s an opportunity to build franchises that can become mid-stream operators rather than purely buying a tube and extracting the yield.

we’ve had in emerging markets overall.

7. Will you be increasing your

investments in Latin America moving forward?

FS: As I mentioned, the real story of Latin

6. What has been your due diligence

America has only just begun. The story of more democracy, better institutions, stability and the middle class – these are themes that will continue. As long as this continues on a macro basis, the underlying micro trends will continue. We’re going to be highly opportunistic. This means committing on a primary basis or a secondary investment. We’re going to continue to dedicate resources to meet people in the region as well. We’re not just going to do an allocation and focus on two or three managers. We want to really understand what we’re gaining exposure to. This could be discrete industries, countries or companies.

FS: We’ve identified 120 or so GPs and I’ve

8. What advantages have you found

process in the region?

met with 80 to 90 percent of them. The ones I feel very comfortable investing with are 5 to 10 percent. A lot of the heavy diligence with uncertain results that you might expect in emerging markets is bridged by the fact that the GPs in Latin America are easier to reference than in other emerging economies, so you can see their patterns of success in the past, etc. The information asymmetry is one of the bigger problems

attending Latin Markets’ events?

FS: It’s a very efficient venue to meet

people, whether it’s potential investors or GPs. A lot of the people I’ve met – the spark of these relationships were the Latin Markets events. It makes my life easier.



Following up with

SIGULER GUFF 1. Can you discuss some of the areas of

interest to Siguler Guff in Latin America since I last spoke with Managing Director and Partner, Jay Koh, in July?

CC: For the next two to three years we will

continue to evaluate new funds. We actively meet with managers, even those that are not presently raising capital. We prefer a bottomup approach to evaluating companies and funds. When it comes to the time when a manager is raising a fund, we often already have an opinion on the opportunity and then we do the formal due diligence.

Cesar Collier Managing Director



On the co-investment side, our direct private equity and operational experience allows us to discuss and source opportunities with our managers. Our co-investment pipeline is large. We’ve looked at over 100 co-investments in the last three years, and we’ve chosen four. In 2013, we invested in Òticas Carol, currently the leading Brazilian optical retailer. It’s a tremendous growth story of 40 percent yearover-year growth with over 100 stores opened in each of the last three years. We closed 2013 with over 600 stores. This is a company that had only 180 stores three years ago. We also made a secondary investment recently, entering into a mining company that has one of the largest reserves of iron ore in the world. As we speak, we are looking at five to six co-investments. We are increasingly looking at mid-size funds with strong track records and corporate governance.

LPEJ Q1 2014: Siguler Guff

This is a part of our portfolio that is growing and I expect that we will commit to more mid-size managers going forward.

2. As of today, in Latin America, how

many of your investments are regionally focused? And country focused?

CC: We have exposure currently to three

regional funds and a fund that focuses on Colombia and Peru, so four of our 12 funds are regionally focused. This translates into a mix of underlying companies of which

CC: Long-term capital is still scarce in

Brazil and there is a universe of over 15,000 companies that are large enough for private equity investment; therefore, there are opportunities for the local private equity industry to invest in the companies that present the strongest growth potential with a competitive edge. When combining this with improved corporate governance, stronger management and stronger balance sheets, it becomes a very powerful driver for growth. I think this has not changed with slower overall GDP growth. On the contrary, the private equity industry can be

“We’ve looked at over 100 co-investments in

the last three years, and we’ve chosen four. In 2013, we invested in Òticas Carol, currently the leading Brazilian optical retailer.” approximately 80 percent are in Brazil and the rest are in Peru, Colombia, Chile and Mexico. Going forward, we will actively look at funds focused on Colombia, Peru and Mexico, and I expect that we will continue to have exposure to Brazil as well as regional exposure.

3. Could you speak more to the

economic dynamics and sectors that you find interesting in Colombia, Peru and Mexico?

CC: These three countries are seeing a

rise in middle class consumption and, as a consequence, we like sectors in that space, including retail, consumer goods, consumer finance and logistics. In addition, there are many infrastructure developments in these countries and we see opportunities in companies that provide services to the supply chain of these developments. Lastly, health care is an area we like given its strong future growth potential as well as our global expertise in the sector.

4. Within the current context of

slower GDP growth in Brazil, what type of new opportunities are there for private equity? How can private equity play a part in the overall economy?

even more selective and invest in the best companies at reasonable entry levels.

5. In your opinion, who are some of the best fund managers in Brazil?

CC: Past performance isn’t always a

guarantee for future performance so the list of top fund managers is continuously changing. We like a lot of the managers we’ve invested with over the years and will continue to partner with many of them.

6. Your current investment model

utilizes 70 percent of a portfolio’s capital to invest in funds and 30 percent for co-investments. Do you see the 70 to 30 percent ratios changing at all in the future? Why is this ratio advantageous for your firm?

I mentioned relates specifically to strategy. We look at what the manager’s niche differential is, and whether or not this niche is still working in the country. For example, a large manager focused on minority deals — this niche still exists in the region but those that will be successful in this niche are the high quality and brand name managers with whom entrepreneurs are willing to partner. With high operational involvement in the deals -- not necessarily full buyout deals, but control deals -- there is a specific skill set that is necessary. There are a small number of managers who have this skill set and have set up the operational structure to successfully execute these deals. We consider what entrepreneurs need and then look at the manager’s structure, experience and track record, and decide whether or not to invest.

7. Lastly, what do you find valuable

about attending Latin Markets’ events?

CC: I’ve been close with Latin Markets for many years. You recently commemorated your fifth anniversary and I’ve been at the conference for all five years. The team is great and I look forward to continuing to develop our relationship in the coming years. Mr. Collier spoke on the panel, “A Conversation with Siguler Guff” at the 5th Annual Private Equity Brazil on December 9-10, 2013.


CC: There can be a temptation to

become a direct investor, but if you move exclusively into direct investing you risk being perceived not as an LP, but as a GP competitor. We want to continue to partner and collaborate with the best GPs. To do business in emerging markets you have to be very specialized and we believe that every one of our GPs has a unique way of doing business. The bottom-up approach






The Leona M. and Harry B.

helmsley charitable trust 1. Give us a brief background on your role at the Helmsley Charitable Trust.

BHS: I am part of the senior investment

team that develops and implements the overall investment strategy for Helmsley. I am principally responsible for the deployment and management of Helmsley’s investments in alternative asset classes such as private equity, venture capital, hedge funds and real assets.

2. In her interview with LPEJ in Q4

2013, your CIO mentioned that your trip to São Paulo was part of a broader due diligence trip to Latin America. What type of research have you done since then and how are you evaluating opportunities in emerging markets and Latin America?

BHS: Emerging market investments are an

Bei Saville

Director of Alternative Investments



integral part of our overall portfolio. There are many considerations when evaluating opportunities in emerging markets today: country, sector, manager, equity vs. debt, public vs. private, global vs. local, etc. Our research is very thematically driven. One of our themes is emerging market middle class growth. We have found that the index doesn’t reflect the growth sectors in the economy such as consumer growth since they typically are only a fraction of the index weighting. A lot of people are looking to invest in consumer growth and as a result the public companies can be expensive

LPEJ Q1 2014: Helmsley Charitable Trust

because there are only a few choices. On the other hand, private investment provides access to participate in those areas where the strongest organic growth is found. As a foundation, we can use our long-term horizon to benefit from the growth potential of private investments in emerging markets.

3. Speaking of Asia, some talk

We can’t talk about emerging markets as a whole anymore. There’s a divergence among the countries. Certain countries have stronger balance of payments, are less dependent on foreign capital inflows and have more stable financial systems. Evaluating country risk is the key, in our

been extremely strong this year, LPs with a diversified global portfolio have not experienced liquidity issues. Since the global financial crisis, China has led the global economic recovery. The number of Chinese companies that got listed in China and the US reached historic levels a couple of years

about the difficulty of finding exits in countries like China. What is your experience with finding exits in emerging markets as a whole?

BHS: Because the US exit markets have

4. What has been your experience

with the talent of the managers across Latin America?

BHS: We look at country, sector and

manager. Who we want to partner with is one of the most important questions we need to answer. Sometimes we are fortunate to find a manager we really like in the country we like who can help educate us on the sector. It’s typically advantageous for the manager to be local, especially in Latin America where there are a lot of family businesses and unique

“We’re a long-term investor in emerging markets.

Potential headwinds in local markets are actually good opportunities for the market to rejuvenate itself.” opinion, to investing in emerging markets. You need to select the right country based on a view of the next five to 10 years in a sector where you expect tailwinds. We do country due diligence trips to improve our knowledge of regional economic issues and build our direct local connections. In addition to our recent trip to Latin America, we’ve been to Asia, Europe and the Middle East. We’ve only made local investments in emerging markets in three countries. We ask the questions: Are the markets deep and developed enough? Do we know the markets well enough? One trip to Latin America of course does not qualify us as experts. Our trip in December was an extension of a lot of previous research in the region and more of a refresher. Brazil is facing some macro headwinds, so we have been examining how companies are preparing themselves if there is a downturn in the economy and how managers are positioning their portfolio. In terms of sectors, we see opportunities in health care and financial services. We are encouraged that there has been an opening of the markets to private equity and overseas investments in Latin America.

ago, but this has since slowed. Some of the companies were not mature enough. There has been a lot of talk of accounting fraud in China as well. Also, the Chinese securities regulators stopped IPOs over a year ago, though this ban was just recently removed. As in other emerging markets, China attracts strategic buyers, particularly multinationals, who are cash rich and would like to acquire local businesses to acquire a distribution network which otherwise could take a long time to build. The multiples they pay could be better than going to an IPO. The GPs are always evaluating these opportunities to find the best cash on cash multiples. The entrepreneurs are more amenable to M&As now as well. We’re a long-term investor in emerging markets. Potential headwinds in local markets are actually good opportunities for the market to rejuvenate itself, like what happened in the US venture space. Eventually the stronger players will survive.

cultural aspects. We pay a lot of attention to the manager’s governance structure, team culture, hiring process and incentive alignment. We’ve found a number of great local managers who were either educated or trained in the US. But there are also very talented managers who are truly homegrown. Overall, we think talent could be a bottleneck for Latin America. This puts a premium on manager selection.

5. Why are Latin Markets’ forums advantageous to attend?

BHS: The Latin Markets’ forums provide

a platform for investors to exchange firsthand information. For a foreign investor, the experience and network are invaluable. Ms. Saville spoke on the panel, “Emerging Market Manager Selection and Monitoring” at the 5th Annual Private Equity Brazil Forum on December 9-10, 2013.







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The Latin Private Equity Journal Q1 2014 Digital Edition  
The Latin Private Equity Journal Q1 2014 Digital Edition  

The Latin Private Equity Journal (LPEJ) is a Latin Markets weekly newsletter and quarterly publication featuring interviews with LPs, GPs, g...