ALBA assisted to the annual LAVCA (Latin America Private Equity & Venture Capital Association) conference this past week in New York. During the conference, we could confirm the renewed interest in Argentina for private equity opportunities as attendance by Argentine private equity players was high and there was a specific panel dedicated to investing in Argentina.
The annual survey of Latin America private equity prepared by Cambridge Associates in association with LAVCA (full report under the Research tab) was released at the conference. The survey covered 103 institutional investors of which 73% were international and 27% were Latam based. With respect to assets under management (AUM), 78% of the respondents had AUM above USD 1 billion.
Argentina came in second after Brazil (44%) with respect to investor sentiment, where 40% of the investors believed Argentina’s risk return equation is improving. To evidence the leap in investor sentiment for the country, in 2015 Argentina came in as the least attractive opportunity in Latam.
(charts were extracted from the LAVCA/Cambridge Associates PE survey report)
With respect to expected returns, Argentina came in first where 73% of investors believed Argentina could generate returns above 16%. Brazil came in second with 54% of investors expecting returns above 16%. An even wider difference was among those investors seeking returns above 25% where 27% of the investors expected Argentina to yield such returns while Brazil and Peru came in second with 11% of the investor base.
In addition to the renewed interest in Argentina private equity, a much larger contingent of Argentina VC professionals attended the VC chapter of the conference showcasing the success the VC community is achieving in the country.