New York - While many investors are holed up evaluating their exposure to toxic assets and volatile markets, some leading endowments, foundations and corporate and public pension funds are still looking to make new commitments to Latin American private equity and venture capital, as evidenced by the attendance at LAVCA's third LP/GP Roundtable in mid-October.

The LP panel discussion took place just days after the region's capital markets and currencies were buffeted by the global crisis, and panelists debated whether the correlation in global public markets would pass through to private markets and the broader economic environment. Bernard McGuire, a Managing Partner at PCG International, a global fund of funds, predicted an "abysmal year for fundraising in 2009," while Doug Coyle, an Associate Director who oversees global PE for the Rockefeller Foundation, voiced the universal concern that "no one knows how long or deep recession will be - no one knows where bottom is."

But panelists also echoed a theme that many general partners in the region have been sounding: the environment for new investments should be optimal in 2009. "I think that shrinkage in emerging markets will be temporary," said McGuire, "and post bust vintage years are good - it is a question of people's ability to make commitments." "The vintage years of 2001-2003 were great, and the expectation is that investments made over the next two years should deliver good returns," according to Coyle.

On the sidelines of the formal panel discussions, there was talk of whether LPs, particularly those who now find themselves with liquidity constraints, will slow commitments. Some large public pension funds have seen dramatic reductions in the valuation of their portfolios, which has skewed their allocations and may make it difficult for them to honor commitments to specific regions or asset classes.

Investors shared their perceptions of Latin America and frank assessments of how they view the region in the context of global developed and emerging markets. Clariza Mullins, who as Treasurer of Pepperdine University in California manages an endowment of approximately $700m, remarked that while "our first concern and commitment is to US private equity and venture capital, we are sold on the prospects for emerging markets." On a due diligence trip to Brazil in 2007, Mullins was impressed by "both the top down economic environment, and the bottom up opportunities," but the university is still on the "learning curve" in Latin America as the trustees are not yet comfortable with the region and it's inflation history.

McGuire was bullish on opportunities in Latin America, highlighting the track records of firms such as Advent, Southern Cross and Patria, that have performed very well through the cycles since the 1990s, and comparing these favorably to Chinese PE firms. "Most Chinese funds today have been raised after 2004, and those managers are holding 20 or more portfolio companies while raising their third fund." He pointed out that as a region Latin America is attractive in terms of the supply and demand of capital, with more competitive asset prices than those found in other EM.

But McGuire also acknowledged global competition for capital, and said that PCGI expects LatAm managers to be delivering returns in excess of 30%. Coyle stated "we expect to be compensated for the additional risk of investing in EM," and expressed a long-term view of opportunities in emerging economies, "we ask where a region will be in 10 years, for example, with millions of people moving into the middle class in China, or EU integration for Eastern Europe economies."

One challenge faced by global institutional investors looking to include Latin America in their portfolio of EM private equity is the relatively limited number of regional funds in the market. Many LPs are looking for balanced regional exposure to key markets such as Brazil, Mexico, Colombia and Peru, but are most often approached by managers with single country funds in those markets. Matthew Cole, a partner at North Bay Equity Partners, moderated the LP panel and cites this as an impediment to increasing the amount of global institutional capital committed to Latin America. There also seems to be significant investor interest in a regional fund of funds. While both PCGI and HarbourVest are active in Latin America, there are few if any other firms of this type investing in the region.

November 3 — Brazilian stocks rose to the highest in two weeks after Banco Itau Holding Financeira SA agreed to acquire Uniao de Bancos Brasileiros SA, increasing speculation that more banks will merge to weather the credit crisis. The merger will create the nation's largest bank with 575 billion reais ($261.4 billion) in assets. Banks gained on speculation Banco Bradesco SA, the biggest private bank, will buy other financial companies to stay competitive. "The fact that they are paying a premium for Unibanco throws out the worry that Unibanco was in trouble," said Carlos Camacho, of GAP asset Management in Rio de Janeiro. "This creates a strong institution, I think it's excellent." Bloomberg

October 29 — The Federal Reserve agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore to boost the liquidity of dollars in emerging markets. "The Federal Reserve has authorized the establishment of temporary liquidity swap facilities with the central banks of these four large systemically important economies", the U.S. central bank said in a statement. The swap lines will be in place through April 30, the Fed said. Bloomberg Full Story

October 31 — Costa Rica has ratified the free trade agreement with Panama that will see commercial channels open up between the neighboring states. Latin Lawyer

October 30 — Sao Paulo-based GP Investments has accumulated a 6% position in Invest Tur, the high-end tourism real estate developer that went public in 2007 with little more than a business plan and a pipeline. Between a July 2007 IPO and mid-October 2008, Invest Tur shares have fallen 60%. But the shell company has a strong cash position and no debt, which puts it in a relatively robust position compared with other real estate developers, claim firm executives. GP is understood to be seeking to increase its stake beyond the 6%. Latin Finance

October 30 — Conduit Capital Partners LLC, a private equity investment firm focused on infrastructure investment and development in Latin America and the Caribbean, today announced that it has acquired a 50 percent ownership stake in Brazil's GLEP Energias Renováveis e Participações S/A (GLEP), a privately-owned company that develops and holds interests in small hydroelectric projects. Terms were not disclosed. Conduit Capital Full Story

October 22 — US private equity firm Brysam Global Partners has acquired an 18.8% stake in Colombian bank BCSC for 230bn pesos (US$98mn), according Colombian financial regulator Superfinanciera. Brysam's entry into BCSC's property will be made by subscribing new bank shares and purchasing shares from its controller, non-profit Fundación Social group, in equal proportions. After regulatory approvals are granted, Fundación Social will remain the largest shareholder in BCSC with a 71.7% stake. IFC owns a 9.51% stake in BCSC. The bank is Colombia's 12th largest and focuses on mortgage loans and microlending. The bank had 562bn pesos in equity as of end-August. Brysam already owns a 27.9% stake in Mexican financial services group IXE. BNamericas

October 22 — The financing deal for US-based private equity firm Advent's acquisition of Aerodom, which operates airports in the Dominican Republic, has closed. Latin Lawyer

October 22 — The Riverside Company has made its first South American investment with the acquisition of UV-Vis Metrolab, an Argentine manufacturer of automated clinical chemistry analysers for the human medical market. Metrolab is the second add-on to Hungarian platform company Diatron. Metrolab, together with Israeli-based Novamed, acquired the company in December 2007. Riverside made the investment from Riverside Europe Fund III. AltAssets

October 17 — Aureos Capital's Fondo Aureos Colombia Fondo de Capital Privado fund has held a first closing on $35.8m. The fund will make its own investments and also invest alongside the Aureos Latin America Funds, previously raised by Aureos with commitments of $140m at first closing. AltAssets Full Story

October 16 — The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved $350 million in financing for three new private equity investment funds that will provide much-needed capital to a host of sectors in the economies of Latin America. The funds will have a combined total capitalization of $1.45 billion. OPIC Full Story

October 3 — Brazil-based asset management company Gavea Investimentos will invest up to US$130 million in Cosan, one of Brazil's top sugar and ethanol groups. The controlling shareholder of Cosan, Rubens Ometto Silveira Mello, will invest an additional US$50 million. Reuters Full Story

September 10 — IGNIA Fund I, LP announced that, through its wholly-owned subsidiary IGNIA Bienes Raices S. de R.L. de C.V., it has entered into its first real estate transaction, an investment of US$2 million in the second stage of Jardines del Grijalva, a housing project in Chiapas, Mexico. Hispanic Business Full Story