LatAm investments hit six-year high

Private equity and venture capital firms invested $8.9bn in Latin America last year, up 13 percent over 2012.

Private equity and venture capital investment in Latin American rose to the highest level seen in six years in 2013, according to data from the Latin American Private Equity & Venture Capital Association.

Capital invested in the region grew 13 percent year-over-year to $8.9 billion in 2013, while the number of deals fell slightly, from 237 to 233.

“[The increase in capital invested] wasn’t necessarily something I would have predicated,” LAVCA president and executive director Cate Ambrose told Private Equity International “[It] was partly driven by the fact there were larger deals done.”

In terms of sectors, oil and gas investments captured the most capital than any other industry in the region, with $1.6 billion invested in the sector.

Brazilian companies attracted more interest than any other country, receiving 68 percent of the total capital invested in the region, down from 72 percent in 2012. In addition to having the largest population in South America, Brazil also benefits from having larger fund managers than other countries in the region, Ambrose said.

However, the Andean region and Mexico continue to attract significant levels of private capital investment, with a record $1.1 billion invested in 20 deals in Colombia and roughly $632 million deployed in 33 deals in Mexico last year, according to LAVCA data.

Four large oil and gas transactions in Colombia accounted for 72 percent of capital invested in the country in 2013. While these large deals could lead to a decline in capital invested this year, the country continues to attract new investors and new funds, Ambrose said.

Latin American exits in 2013 were essentially flat year-over-year, totaling $3.7 million, compared to $3.8 million in 2012. Private equity firms completed eight public offerings in 2013 via four different stock exchanges in Brazil, Chile and Mexico.