(FT Tilt) May 26, 2011 – A group of heavyweight Brazilian investors are coming together to launch a R$100m ($62.5m) venture capital fund. The founders include former Itau-Unibanco and Itau BBA bankers and the founders of one of the country’s leading cosmetics company Natura.
The fund named Pitanga (after a Brazilian-native tropical fruit), will invest in high innovation, high risk, high return companies, according to news reported first by O Estado de S. Paulo. Pitanga has yet to get clearance by the country’s exchange and securities regulator (CVM) to start operating.
“We are establishing a classic venture capital fund,” Eduardo Vassimon, a former vice-president at Itau BBA and one of the fund’s managers, told O Estado. Vassimon will co-mange the fund with Fernando Reinach, a former executive director for Votorantim Novos Negocios. In that fund, Reinach invested in biotechnology companies Alellyx and CanaVialis and information technology company Tivit, according to the O Estado report.
Venture capital and private equity fund penetration is still small in Brazil, where the most active funds are institutional — with a higher risk-aversion profile than VC and PE funds.
But that is slowly changing, at least when it comes to private equity. A study by the Emerging Markets Private Equity Association (EMPEA) in conjunction with the London investment fund Coller Capital with 156 institutional investors showed they plan to over Brazil will also see the largest increase in new PE investment, as 14 per cent of the 156 institutional investors surveyed said they expect to open exposure to Brazil over the next year, and 11 per cent said the same of Latin America in general.
by Vivianne Rodrigues