Latin American fundraising set to break record

While fundraising appears on pace to break the record $8.1bn raised in the region in 2010, Latin American deal volume has fallen by 30% compared to the same period last year.

Latin American private equity and venture capital raised $4.9 billion across 14 funds in the first half of 2011, posting a 59 percent increase over the same period last year, according to a report from the Latin American Venture Capital Association.

A majority of committed capital went to Brazilian funds, which accounted for 67 percent of Latin America’s first-half fundraising. The country has hosted several billion dollar fund closings in the last few months, including BTG Pactual and Vinci Partners, which closed on $1.6 billion and $1.4 billion respectively for their funds late in the first half. This summer, Patria Investimentos closed on $1.25 billion for its fourth fund and Gavea Investimentos picked up $1.8 billion for its fourth fund, setting the record for the largest South American fund closing in history.

If first half fundraising trends continue, the total amount raised will shatter the record for the amount raised for the region, set at $8.1 billion last year.

Curiously, as commitments in the region peaked, investments appear to have slumped. Deal volume fell by 30 percent compared to the same period last year, when $3.8 billion changed hands. 

In its report, LAVCA said that exits have also spiked for the region, with 33 private equity-backed exits valued at $8.9 billion – well above the $3.5 billion raised through exits in 2010. Ashmore Energy International’s divestment of its Latin American portfolio accounted for over $4 billion of the total, according to the report.

LAVCA is a non-profit organisation that supports the growth of the Latin American and Caribbean private equity and venture capital industry.