Private Equity Firms Optimistic About Latin America

The results of a survey published by LAVCA and Coller Capital are good news for Latin America.

Of the 105 international private equity investors polled, 38% reported plans to increase new commitments to Latin American private equity funds over the next year, and 49% said they would maintain their existing commitments. Moreover, 43% said they would consider investing in a first-time Latin American fund.

The LPs polled were most optimistic about the region’s potential for economic growth and deal flow. However, remaining issues were acknowledged, including underdeveloped M&A and IPO markets. Taxes and regulations were also cited as problematic.

Despite the obstacles in sight, respondents reported positive expectations. Three quarters expect annual net returns of over 16% from their Latin American PE funds (excluding Brazil), as do two thirds with respect to their Brazilian PE funds.