Altamar joins forces with Chilean institutions

The backing from two Chilean financial institutions enables the Madrid-based firm to strengthen its presence in Latin America with a new emerging market-focused vehicle.

Altamar Private Equity, a Spanish fund of funds manager, has sold a 20 percent stake of its holding company to two Chilean financial institutions in a bid to strengthen its position in Latin America.

LarrainVial, an investment bank, and Consorcio Nacional de Seguros, a financial services company focused on insurance, acquired the stake for an undisclosed amount through LVCC Asset Management, a company owned by both entities, Altamar said in a statement.

Altamar will retain its independence, while the two institutions will be able to increase their knowledge about the asset class, the firm said.

The agreement comes as Altamar is on the verge of launching a new fund, Altamar VI, which will be focused on Latin America and Asia. The fund, which will have a $200 million target, will be the firm’s first Latin American-focused vehicle, following the opening of an office in Santiago in 2011. The fund is likely to launch before the end of the year, according to a source with knowledge of the process.

There is a large pool of money in Chile, Colombia and Peru that was previously not accessible

Ines Andrade

Latin America is an attractive region due to its fundraising opportunities, Ines Andrade, a partner at Altamar, told Private Equity International.  She explained that until recently, large private pension funds as well as insurance companies had been prohibited from investing in international private equity funds. “There is a large pool of money in Chile, Colombia and Peru that was previously not accessible,” she said.

In addition, Spanish regulations are very similar to those in Latin America, Andrade added, “So we have an advantage there to other Anglo-Saxon players”.

The backing of the two institutions will help Altamar attract Latin American investors to its sixth fund.  “In Spain, everybody knows us and everybody trusts us, but when you go abroad, investors feel a lot more comfortable if there’s a big institution behind you,” Andrade said. The firm had been approached by large institutions that wanted to buy a majority stake in Altamar, but the firm did not want to lose its independence, she added.  

The firm’s current Altamar fund V, a 2011 vintage, has had several closes for a total amount of $200 million and is expected to close by the end of the year on $225 million, the firm said.  The fund was originally due to close in August, but remains open because two investors had to do due diligence, according to Altamar. Altamar V has an investment period of three years and after 1.5 years the fund is 58% committed to underlying funds.

The firm prefers to launch a $200 million fund every year, Altamar said, instead of launching a fund of a larger size every three to four years.  “It makes more sense as investors are demanding more focused products. So we have changed our approach, and are raising funds more frequently in a niche area,” Andrade said.