Latin American fundraising doubles

Private equity funds focused on Latin America drew more than $1bn in 2004, more than double the capital drawn the previous year, with Brazil and Mexico the most popular regions.

Indicating a resurgence in LP interest for the region, Latin America private equity funds drew roughly $1.02 billion (€800 million) in 2004, according to figures compiled by Venture Equity Latin America.

The fundraising statistic includes 13 private equity funds that held closings in 2004. Only $417 million was raised for Latin American private equity funds in 2003, a small notch up from the roughly $400 million raised in 2002.

The recent figures indicate a renewed interest in the region, but is still significantly lower than the more than $3.6 billion raised in 1998.

According to Judy Kuan, editor of Venture Equity Latin America, the capital raisings of 2004 were primarily for country-focused funds, not regional funds. Funds targeting Brazil and Mexico drew roughly 60 percent of the total capital commitments, she said. The two largest private equity funds raised in 2004 were for Brazilian investment.

“The fundraising is really reflective of where a lot of investment went in 2004,” said Kuan, adding that she is seeing more regional funds come to market this year.

Among the 13 funds was one US fund with a 25 percent allocation to Mexico. Venture Equity Latin America counted 25 percent of that fund toward its Latin American statistics.

Boston-based Venture Equity Latin America is a bi-weekly publication. The company is preparing to release an annual review on the region.