Green investing has gone global. A case in point is provided by Panama City-based private equity firm Grupo Ecos, which focuses on sustainable investing throughout Latin America and has most recently acquired a 35.5 percent stake in environmentally friendly Colombian forestry services provider Silvotecnia.
Medellin, Colombia-based Silvotecnia offers services including the management of forestry plantations and natural forests, providing environmental, consulting and general forestry industry advisory services in line with social and environmental responsibility principles.
Ecos chief executive Andreas Eggenberg tells PEI his firm was drawn to the deal by the lack of organisation in the Colombian forestry industry compared to the equivalents in Chile and Brazil, an attractive macro environment for investing, and a strong management team within the target company.
By virtue of Ecos's investment, Silvotecnia will gain access to best practice through the firm's network of forestry portfolio companies and general network in Latin America. Additionally, the investment in Silvotecnia will be overseen by investment manager Claudio Cabezas, a forestry engineer who arrived at Ecos with 10 years of experience working within the forestry industry.
Exit scenarios for the investment include a trade sale, a sale back to current owners or a sale to a larger fund, says Eggenberg. An initial public offering is not on the table unless the Colombian stock exchange introduces new vehicles for smaller companies.
The investment was made via the Ecos Forestry Fund, which targets small- and medium-sized sustainable forestry projects in Latin America. The focus of the fund is providing growth capital without regard for size across speciality wood, downstream integrated timber companies and forestry services. Three forestry investments other than Silvotecnia have been made to date: Panamanian teak woods company Ecoforest, Guatemalan teak and speciality woods company Interforest, and forestry services company Panama Forest Services.
Ecos has made 10 investments to date in total, the largest of which was more than $20 million and the smallest of which was $200,000.
The forestry fund, like the firm, was established in 2007. At the same time, Ecos launched the Sustainable Equity Fund which invests across renewable energy, environmental and residual services and other sustainable businesses. Both funds are backed by Swiss high-net-worth individuals and family offices.
ADVENT INVEST R$360M IN BRAZILIAN CREDIT MARKETS
Global private equity firm Advent International has purchased a 30 percent stake in CETIP, the largest central depository for private fixed income securities and over-thecounter derivatives in Latin America for roughly R$360 million (€128 million; $171 million). CETIP – which has assets under management of R$2.6 trillion and averages daily trading volume of more than R$50 billion – was established in 1986 as a mutual-owned non-profit organisation by entities including the Central Bank of Brazil. It was de-mutualised in June 2008.
MACQUARIE TO LAUNCH MEXICAN INFRASTRUCTURE FUND
Australia's Macquarie Group, the largest private manager of infrastructure assets worldwide, is in the process of creating a new unlisted infrastructure fund focused on Mexico. The fund will be housed within Macquarie Capital, Macquarie's investment banking division and run out of Mexico City, where the firm opened an office earlier this year and which it staffed with several employees transferred from the New York office.
CLIFFTOP CAPITAL RAISES $200M
US-based Clifftop Capital, co-founded by former Quantek Opportunity Fund executives Miguel Paredones and Joshua Castillo, has closed its debut fund on $ 200 million for investments in Colombia, Mexico and Peru. A second fund and an office in Mexico City are both in the works.
PALADIN AND CONSTRUTORA ALTANA LAUNCH $30M VENTURE
The $30 million joint venture between Brazilian developer Construtora Altana and Los Angeles-based private equity real estate firm Paladin Realty Partners has started operations after achieving a fund closing in February. The fund is targeting Brazil's affordable housing market which serves families with joint incomes between roughly $8,200 and $27,000 a year. Altana plans to build between 2,500 and 3,000 units over the next two years in São Paulo and Minas Gerais states. The units will be priced between R$60,000 (€20,600; $27,300) and R$130,000 apiece and are aimed at Brazil's growing middle class.
SOUTHERN BRIDGE CAPITAL TO LAUNCH SECOND HOUSING FUND
Cayman Island-based investment management firm Southern Bridge Capital is reportedly planning to launch a new private equity fund dedicated to investments in middle class and affordable housing, with a regional emphasis on Central America, the Caribbean and the Andean region. The fund will target $150 million, more than three times the $42 million raised for its Central American & Caribbean Real Estate Fund I in late 2008.
GP'S LAHOTELS ACQUIRES REAL ESTATE FIRM
Brazil Private equity firm GP Investments' publicly listed platform company LAHotels, created in December 2007, has merged with real estate developer Invest Tur, in which it now owns a 50.7 percent stake. Invest Tur was founded in March 2007 to develop real estate opportunities in the tourism sector, acting as a land bank and developer in the second homes business. In July 2007, Invest Tur listed on Brazilian stock exchange Bovespa.
IFC RECAPITALIZATION FUND MAKES DEBUT INVESTMENT
The International Finance Corporation's IFC Recapitalization Fund has made its first investment. The fund, founded by the IFC and the Japan Bank for International Cooperation in February, has invested $20 million in Paraguay's Banco Continental, allowing the bank to continue lending to small- and medium-sized businesses. The fund will in return receive preferred stock.