THE NEW YORK TIMES: Brazilian Private Equity Firm Near Closing on $1 Billion Fund. The investment firm Gávea Investments, founded by the former Brazilian Central Bank president Arminio Fraga and Luiz Henrique Fraga in 2003, is near final closing on a new private equity fund that could exceed $1 billion, two people familiar with its plans said. The fund, the fifth from the firm, which has been owned by J.P. Morgan Asset Management since 2010, is likely to close by the end of this month and come in at $1 billion to $1.2 billion, one person said. Both people spoke on condition of anonymity because they were not authorized to speak for Gávea, based in Rio de Janeiro. A Gávea spokesman declined to comment, citing regulatory restrictions. The expected close would inject some momentum into the private equity market here and comes as several prominent firms are raising funds despite years of weak economic growth and few improvements in a still-merciless business climate. The Brazilian firm Patria Investments, in which the Blackstone Group has a stake, is raising a $1.5 billion fund, according to one individual with direct knowledge. It indicated in a Securities and Exchange Commission filing last month that it had already obtained $1.4 billion. The Carlyle Group is raising what it hopes will amount to a 1 billion real ($455 million) Brazilian fund, according to people familiar with the firm’s plans. Last year, private equity and venture capital raised in Brazil dropped 35 percent compared with a year earlier, drawing a total of $2.4 billion, according to data from the Latin American Private Equity and Venture Capital Association. But that was primarily because large firms were still investing capital rather than raising it. What happens this year will be a more accurate barometer of investor appetite for Brazil and its private equity market. While many market experts anticipate a slight increase over the 2013 fund-raising figures, few expect a return to the halcyon days of 2010 and 2011 when Brazil was the darling of emerging market investors. Gávea’s new fund is smaller than its previous one, which totaled $1.9 billion and closed in 2011, and also needed a few more months to close, according to one source. It is also less than the $1.5 billion that the firm set out to raise when it started its efforts last June, this person said. This time around, “it was a harder sell,” for the firm, said one individual familiar with its efforts. Back in 2010 and 2011, he said, “there was a lot of easy money,” for the private equity market. Today, “everything is a bit slower and a lot of people are reallocating funds,” the individual said. Still, many existing backers seem to have returned to Gávea new fund, suggesting there remains an appetite for investing in Latin America’s largest economy. They are betting that this is the right time to invest, when many have been scared away, and valuations have fallen. The firm’s portfolio companies include Cell Site Solutions, a cellphone tower company it started in 2012 in a joint investment with Goldman Sachs.
Posted on: Mon, 21 Jul 2014 12:08:00 +0000
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