Latin America is attracting more private equity investments from institutions based both domestically and overseas, lured by a combination of favorable regulatory changes, demographic shifts and strong economic fundamentals, according to two reports published this month.
Institutional assets in Latin America are growing at one of the fastest rates on the planet at 20% compounded annually over the past three years, with aggregate pension assets having reached about $638 billion in Brazil, Mexico, Chile, Peru and Colombia
“Brazil has leapfrogged China as the most attractive market for dealmaking, considered the center of private equity activity in Latin America — has attracted the most commitments recently and offers “compelling long-term opportunities,”
Colombia also held strong potential for managers looking to invest in the country, according to sources who contributed to the report. “The case for private equity (in Colombia) is supported by strong deal flow … and attractive protection of minority shareholder rights,” ranking sixth highest in terms of investor protection in the World Bank.
Chile has the most established business environment in Latin America, according to the report, “combining a well-developed banking sector and capital markets with prudent regulations.”
Peru investors was taken a wait-and-see approach to Peru on the last 2011 election in June, won by Ollanta Humala, PERU is a country that features practically all of the planet`s climate, with remarkable natural resources, mining, and power resources, third largest country in south america 7.6 million hectares of agriculture potential and best commodity segment investment opportunity. The country`s top exports apart from agriculture include COPPER, ZINC, GOLD & SILVER and only the 10% of the mining potential has been explored so far. It holds the third potential investment place worldwide for the last 3 years in the mining sector.
Mexico, which is the second-largest economy in Latin America behind Brazil, also held strong potential. However, “Mexico has a high correlation to the U.S.A., which ties the economy to the recovery of the advanced world,” according to the Partners Group report.
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