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2014 record year for LatAm dedicated funds

Year-on-year investments in Mexico double

2014 was a record year for private equity fundraising in Latin America according to data released today by the Latin American Private Equity and Venture Capital Association (LAVCA). Capital committed to Latin America dedicated private equity and venture capital funds reached $10.39 billion in 2014, exceeding the previous record of $10.27 billion in 2011.

Data also show that fundraising is getting more diverse. In the record year of 2011, there were 35 fund closings compared to 56 in 2014. The five largest funds accounted for 81 percent of the total capital committed in 2011, as compared to only 58 percent in 2014.

“What this tells us is that the universe of managers raising capital for Latin America continues to expand and that despite regional growth projections of under 2 percent for 2015, LP demand for exposure to the region remains strong,” said Cate Ambrose, President of LAVCA.

Brazil and Mexico remain the largest players in the region. Brazil-focused funds captured $5.56 billion over 23 funds in 2014, equivalent to more than half of the regional total of funds raised. In Mexico, six new funds backed by local pension funds raised $1.33 billion – a 27 percent increase from the previous year.

Transaction activity also increased over 2014, largely driven by venture capital deals. Private equity and venture capital firms invested a total of $7.87 billion in the region through 306 transactions, according to report data. Transactions were smaller, but the number of transactions increased by 31 percent.

Mexico was the second most active market with $1.31 billion being deployed, representing a 102 percent increase in dollar terms from 2013. “It is expected that the Mexican energy reform, along with the increasing demand for oil and gas infrastructure in Brazil and the Andean countries will continue to drive investments in this sector during 2015,” Ambrose added.

Eight large deals related to the generation and distribution of power totaling an aggregate $1.64 billion made energy the top sector in terms of capital invested in 2014.