Brazil Private Equity Takes One Step Forward

After taking a few steps back during the financial crisis, Brazilian private equity is reanimating. However botched IPOs present challenges and there are fundraising blocks.

After a sluggish 2009, private equity (PE) fund managers are painting a picture of cautious optimism over fund raising and exit strategies. They fret, however, that aggressive pricing from investment banks on IPOs, more strategic investors and a batch of newcomers looking to break into the PE market may distort pricing.

After a weak 2009, investment in PE will grow faster than GDP as local pension funds and overseas investors step up their exposure to the asset class, predicts Sidney Chameh, the new president of the Brazilian Association of Private Equity and Venture Capital (ABVCAP). According to the latest central bank survey of economists, GDP growth will be 5.51% this year.

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