HARVESTING RETURNS

New York-based Diversified Private Equity Corporation (DPEC) is moving into the Argentine wine and travel industry with the development of Algodon Wine Estates in the Mendoza region of Argentina.

The development is both a winery and a resort, says DPEC chief executive Scott Mathis, who notes that winery land in Argentina costs just one-tenth that of Napa, California. In Argentina, “wine exports are up well over 75 percent just in the last three or four years,” he says.

Algodon will focus on quality rather than quantity. “Our wine is going to be boutique wine,” says Mathis. “Our goal is not to be the next Mondavi.”

The oldest vines on the approximately 70-hectare property date back to the 1940s and the grapes are harvested by hand. The wines, sold under the name Delgolf, include bonarda, cabernet, merlot and malbec.

DPEC affiliate InvestProperty has raised $11.2 million (€7.1 million) to date from high-net-worth individuals for the development of luxury properties in Argentina. The firm does not have a fund but instead offers co-investment opportunities on a per-project basis.

Mathis's move into Argentina was the result of seeking to diversify DPEC's legacy business in biotech venture capital. He says he finds the value in Argentina attractive. With the peso-to-dollar exchange rate being held at three-to-one to bolster tourism and exports, the devalued US dollar still goes a long way. The Government has been stable as well, with former president Nestor Kirchner's wife Cristina Fernandez de Kirchner winning a landslide victory in October 2007. Inflation, however, remains an investment concern as labour and materials costs continue to rise.

DPEC is currently also developing Algodon Mansion, a luxury hotel in Buenos Aires. Mathis says his firm plans to put an additional $30 million or more into Argentina over the next few years, spread among five to six properties under the Algodon brand name.

CREDIT SUISSE JV CLOSES $300M LATIN AMERICAN FUND
DLJ South American Partners closed its first fund on $300 million (€190 million) for investment in Latin America, with a focus on Argentina, Brazil and Chile. DLJ South American Partners is a joint venture established in December 2006 by Credit Suisse's alternative investments division and a team of Latin American investment professionals led by Carlos Garcia and Marcelo Medeiros. The fund has completed three investments to date. The fund, alongside other investors, formed Arcos Dorados for the purpose of acquiring the master franchise of McDonald's restaurants in Latin America and the Caribbean. The group also acquired Brazilian trade show promotion company Fispal and is the largest shareholder in Brazilian education company EBEC.

LEXISNEXIS UNLOADS LATAM OPERATIONS
Alternative asset manager Palmfund Management is to acquire Latin American publishing operations from information provider LexisNexis. The private equity firm has partnered with a management team to form Legal Publishing Netherlands Coöperatie, which will purchase the local legal, tax and regulatory publishing operations of LexisNexis in Argentina, Chile and Mexico. Operations for the acquired publishing groups will be headed by newly appointed chief executive Juan Alberto. Existing management teams will remain in place as will current brand names: Dofiscal in Mexico, Abeledo Perrot in Argentina and Ediciones Tecnicas in Chile. New York-based Palmfund's Latin America Investment Fund for private equity is targeting $250 million (€158 million) and currently has more than $90 million in commitments.

ABVCAP APPOINTS NEW CHAIRMAN
ABVCAP, the Brazilian private equity and venture capital association, has appointed Luiz Eugenio Figueiredo chairman for the 2008 to 2010 period. Figueiredo is a director at Brazilian alternative asset management firm Rio Bravo Investments and succeeds founding partner of Brazilian early-stage venture firm Marcus Regueira in the role. Patrice Etlin and Sidney Chameh were appointed vice chairmen. Etlin is a São Paulo-based managing director for global private equity firm Advent International and Chameh is founding partner of Brazilian venture and private equity firm DGF Investments.

PERU'S PE INITIATIVE RESULTS IN TWO FUND CLOSES
Two Peruvian funds have been closed by managers that participated in Peru's Proyecto Invertir, a programme launched in 2003 to bolster the country's private equity and venture capital industries, with support from the Peruvian Association for Capital Market Development, the Multilateral Investment Fund and the Peruvian Private Pension Funds Associations. Investment fund manager Apoyo, a six-year old subsidiary of Peruvian conglomerate Apoyo Group, raised $50 million (€32 million) for an agribusiness and forestry fund, while investment group Enfoca raised $50 million for its Peru-focussed private equity fund, Descubridor I, or “discoverer”. The Latin American Venture Capital Association said that each fund was raised entirely from Peruvian pensions.

GEMSTONE TARGETS $200M FOR BRAZILIAN RENEWABLES
Gemstone Capital Advisors, a New York-based alternative asset manager, has confirmed with PEI it expects to raise a $200 million (€126 million) fund that will invest in Brazil's renewable energy industries. Gemstone will target both public and private companies of varying size in the hydro electric power, water treatment, solar and wind sectors, with approximately 20 percent of the fund's capital earmarked for private companies. Gemstone manages assets for high-net-worth individuals, foundations, pension funds, funds of funds, and family offices.

LAVCA EXPANDS BOARD AS LATIN AMERICAN PE GROWS
The Latin American Venture Capital Association's (LAVCA) board of directors recently welcomed four new members: Ernest Bachrach, Advent International's Latin America chief executive; Marcus Regueira, managing director and co-founder of FIR Capital, a Brazilian venture firm that recently became affiliated with Draper Fisher Jurvetson; Arturo Saval, managing director of Nexxus Capital, a Mexico City-based private equity firm; and Scott Swensen, chairman of New York-based private equity firm Conduit Capital Partners. “There is a real need for an active industry association to support momentum and foster further expansion of private equity and venture capital in Latin America,” Bachrach said in a statement. “The association has some great initiatives underway and we look forward to being an active participant.” The new directors were formally welcomed at the association's annual meeting, held in Mexico City in early April.