Posts Tagged “GP”

Will The Large Amount Of Capital Pouring Into Brazil Eventually Push Up Valuations To An Unsustainable Level?

December 2, 2020

An article by Antonia Henbest

‘We will match international valuations very shortly.’

- Brazilian GP

The problem with discovering an unspoilt paradise is that sooner or later somebody else turns up and the tranquillity becomes compromised. This is the current worry for those investing in Latin American private equity, and specifically in Brazil. With a growth rate of 7%, a stable political environment, a young workforce that is better educated and better off than the previous generation, Brazil is having its moment in the sun. This is obviously welcome news for the country’s fund managers who have had to convince investors that the misdemeanours and turmoil of the nineties were not an accurate reflection of the country’s true potential. However, some are undoubtedly concerned that the attention of the world’s private equity industry will effectively end the attractive pricing of deals in the region. The example of the other BRIC countries, such as India & China, where valuations have been steadily rising and hotly sought after, makes some small Brazilian players feel uneasy, ‘I don’t want all this money in Brazil!’ one exasperated Brazilian GP said earlier this year. Is there a magical middle ground whereby money flows easily into the country yet deals remains plentiful and good value? And for how long will this situation continue? Brazil’s fund managers are holding their collective breath.

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