Advent LatAm fund hits record

Financial Times

By James Politi in New York

Published: July 25 2007 23:04 | Last updated: July 25 2007 23:04

Latin America’s appeal to global investors was highlighted on Wednesday when Advent International, the Boston-based private equity group, raised a record $1.3bn fund for deals in the region.

The new fund, Advent’s fourth, is about 3.5 times larger than its previous pool of money for Latin American deals, which closed in October 2005 at $375m.

While the flow of private equity money into Latin America remains small compared with other emerging markets such as Asia, it has been growing strongly, bolstered by the global commodities boom and overseas interest in the region’s equities and debt markets.

Advent, which entered Latin America in 1996, raised most of its new fund from recurring North American investors such as Calpers, the big California state pension fund, and new US investors such as the endowment of Harvard University.

A further 33 per cent of the fund was raised in Europe and 13 per cent came from the Middle East and the Asia-Pacific region.

Brooks Zug, a senior managing director at HarbourVest Partners, a big private equity fund of funds that is investing in the Advent fund, said: “Purchase price multiples of deals in traditional markets such as Europe and the US have got quite high, and many investors are interested in getting exposure where pricing isn’t as competitive, such as Latin America.”

Advent’s Latin America strategy has so far been focused primarily on transactions in Argentina, Brazil and Mexico, and that is expected to continue.

Advent has already announced its first deal to be invested from the fourth fund: in Mexico it recently agreed to buy Corporativo Javer’s housing business. Although the price of the deal was not disclosed, Advent said it exceeds last year’s $500m takeover of Brasif, the Brazilian duty-free retailer.