Nexus Group, a Peru-based private equity firm, has raised more than half of its $600 million target for its second fund for investments in the country, according to a filing with the US Securities and Exchange Commission and sources with knowledge of the fundraising.
Nexus, which closed its debut fund NG Capital Partners on $320 million in 2011, has raised about $372 million, according to the SEC filing. The fund, if it closes on its target, would be one of the biggest pools of capital for investments in Peru. The Carlyle Group earlier this year closed its debut Peru fund on $308 million.
MVision helped raised the group’s debut fund, according to a statement released when the debut fund closed, and the firm is working on the second fund, according to one person with knowledge of the offering. Nexus and MVision did not return requests for comment.
NG Capital Partners I hit its hard-cap with the help of institutional investors like family offices, fund of funds, pensions and sovereign wealth funds from around the world, according to a statement about the close of the first fund. NG Capital Partners I included about 35 percent committed from local and regional sources, 20 percent from Europe, 30 percent from North America and 15 percent from Asia and the Middle East.
The general partner, management and associated affiliates also made a significant contribution to the first fund, according to the statement.
Many managers are targeting Chile, Colombia and Peru for deals, but not necessarily as stand-alone markets; it's much more about the opportunity to build businesses that are pan-Andean and can tap into the larger market of consumers.
The fund’s target of $600 million is relatively large for the country, sources have told Private Equity International. Some have questioned whether Peru’s market is big enough for a fund of such size, though one source pointed out that Nexus Group was part of an investor group that acquired Peruvian pharmaceutical chain InkaFarma for several hundred million dollars.
However, Peru has not yet developed the kind of infrastructure that would allow private equity to blossom the way it has in some other Latin American countries like Colombia, Chile or Brazil, one source said.
Fundraising in Peru is not robust; $137 million was raised in 2012 by two funds and $450 million was raised through three funds in 2011, according to the Latin American Venture Capital Association. In terms of private equity investments, firms completed 12 deals for a total value of about $269 million in 2012, and two deals for $373 million in 2011, LAVCA said.
A few bigger GPs have raised regional funds in recent years that have the ability to invest in Peru, including Advent International.
“Many managers are targeting Chile, Colombia and Peru for deals, but not necessarily as stand-alone markets; it's much more about the opportunity to build businesses that are pan-Andean and can tap into the larger market of consumers,” said Cate Ambrose, president and executive director of LAVCA.