CARLYLE ON CAMPUS

As private equity interest in Latin America continues to rise, The Carlyle Group has returned to the region to make its second investment in a Latin American university and its first in Chile.

Via the firm's $1 billion (€652 million) joint venture with US education provider Apollo Group, it has acquired Universidad de Artes, Ciencias, y Comunicación (UNIACC), an accredited private arts and communications university in Chile.

The 100 percent stake was purchased for $40 million in cash and assumed debt, plus an earn-out based on a multiple of earnings paid in four years which, paid today, would be worth approximately $9 million.

UNIACC has a strong brand in Chile as well as capable local management, says Carlyle managing director Brooke Coburn. Apollo Global intends to make investments in support of the local team to help them expand operations, particularly in online offerings, he says.

Apollo Group has advanced internet education systems and capabilities according to Coburn. Their expertise combined with Chile's high internet penetration will allow UNIACC to expand into internet education and degree programs, he says.

Apollo Global was created in October 2007 and is 80.1 percent owned by for-profit education company Apollo Group, with the remaining 19.9 percent owned by The Carlyle Group's $605 million Carlyle Venture Partners III fund. Carlyle contributed $199 million in October to the joint venture.

Apollo Group is one of the world's largest for-profit education operators, mainly operating in North America. Carlyle's education-related investments have been largely outside North America, including its purchase of Mexican university Universidad Latino Americana.

Apollo Global targeted Chile for a variety of reasons. “Chile has the second-highest per capita income in Latin America, significant student enrollment that has tripled over the last 20 years, low inflation and a stable currency,” Coburn says. It also has a regulatory environment receptive to for-profit education, which Coburn points out is not the case throughout Latin America.

Several other Latin American countries are being looked at by Apollo Global as well, says Coburn. Brazil is attractive due to its large for-profit education sector, which has seen a number of companies go public including Anhanguera Educacional Participacoes and Kroton Educacional. He also reveals interest in Mexico and Argentina.

BRAZILIAN INVESTMENT FIRM RAISES $305M
Publicly listed asset manager Tarpon Investment Group has raised $305 million (€200 million) in commitments. Of that amount, $285 million was committed to the Tarpon All Equities Fund, which completed a third close on $760 million. The All Equities Fund, invests in “deeply undervalued opportunities either in private or public equities” throughout South America, has deployed $475 million since inception in September 2006 and last year returned 51.53 percent. An additional $20 million in new commitments was raised for other Tarpon funds and managed accounts. Tarpon was founded in June 2002 with $1 million in commitments. The firm now has more than $1.3 billion in assets under management, plus offices in Bermuda and São Paulo.

ADVENT EXITS STAKE IN J MALUCELLI
Advent International has sold its 85 percent interest in surety bond provider J Malucelli Seguradora (JMS) to Paraná Banco, a Brazilian consumer credit bank. Paraná Banco floated on the São Paulo Stock Exchange in June 2007. In exchange for its stake in JMS, Advent received a 10 percent stake in Paraná Banco. The Paraná Banco shares received by Advent were worth an equivalent of roughly R$103 million ($61 million; €40 million) at the IPO price. According to media reports, Advent acquired its stake in JMS for R$45.3 million in 2004. At the time of the sale, the Malucelli family, which controls Paraná Banco, retained a minority share in the company.

DOCAS ACQUIRES TELECOM COMPANY
Brazilian Investment firm Docas Investimentos has acquired telecommunications company Intelig Comunicaçes for an undisclosed amount. An international consortium made up of UK company National Grid, US company Sprint Nextel and France Telecom has been seeking a buyer for three years due to the company's weak performance in long-distance. Intelig, which owns 500,000 kilometers of fibre-optic cables in Brazil, was founded in 2000 to compete with long-distance company Embratel, now owned by Telmex. Docas is owned by Brazilian entrepreneur Nelson Tanure.

STRATUS INVESTS IN EUCALYPTUS
São Paulo-based private equity firm Stratus Group has invested an undisclosed amount in timber investment management company, Brazil Timber, via its cleantech-biotech fund. Through its São Paulo-based Timber Value subsidiary, Brazil Timber manages $40 million (€26 million) in timber assets in 6,500 hectares of eucalyptus forests. The company's goal is to surpass $100 million in forest assets under management by year end.

GAVEA IN HARVARD STAKE SALE
Following a significant equity investment by the Harvard endowment, Gavea Investimentos, a Brazilian multi-strategy investment firm with a private equity programme, is nearing $6 billion (?3.9 billion) in total assets under management, according to a partner in the firm. Harvard Management Co., which manages the largest university endowment in the world at $33 billion in assets, purchased a 12.5 percent stake in Gavea last December. Although the total dollar amount of the investment was not disclosed, alternative asset management companies similar to Gavea have recently been priced in the range of between 8 percent and 15 percent of assets under management.

Halcyon Asset Management, a New-York based hedge fund with roughly $11.5 billion in assets, was purchased at 8.5 percent of assets under management. Harvard was a leading LP in several Gavea funds, according to the partner. Rio de Janeiro-based Gavea, established in 2003 by former Brazilian central bank governor Arminio Fraga, is a multi-strategy investment firm with both liquid and illiquid investment strategies. Harvard Management did not respond to requests for comment. Gavea's private equity unit pursues deals in the $10 million to $25 million range. How the newly expanded capital base will affect Gavea's private equity unit is unclear, although the firm has stated that its core investment strategies will remain the same.

BILLIONAIRE RAISING CARIBBEAN FUND
Jamaican-Canadian billionaire Michael Lee-Chin is continuing his push to raise money for Caribbean private equity as the AIC Caribbean Fund II pursues a target of $350 million (?222 million) to $400 million two years into fundraising. ACF II was seeded with $25 million from Canadian fund manager AIC and currently has $225 million in commitments from investors including development finance institution the European Investment Bank and telecom company Verizon. The fund has made one investment to date in telecom company Columbus Telecommunications, of which Lee-Chin owns 50 percent. ACF II targets companies located in the 20-nation Caribbean regional economic bloc and the Dominican Republic. It plans to make six to eight investments in the Caribbean region with 80 percent invested in Jamaica, Trinidad and Tobago and the Dominican Republic.

BOOMING BRAZIL

Fundraising for investment in Latin America grew by 66 percent in 2007, with over 50 percent of capital earmarked for Brazil.
2007 Fundraising Stats
Capital Raised % of total Number Funds
Brazil 2,316 52.4% 17
Colombia 231 5.2% 1
Mexico 182 4.1% 4
Chile NA NA 2
LatAm Regional Funds 1,690 38.2% 6
LatAm/Carib. Total 4,419 30
All dollar amounts are in millions