By Vincent Bevins, Martin Arnold and Henny Sender
Financial Times

September 29, 2010 – Blackstone, the US investment advisory firm, is taking a 40 per cent stake in Patria Investimentos, a Brazilian private equity group, in a further sign of the attraction of Brazil’s fast-growing domestic market to foreign investors.

The deal comes as private equity and asset management groups are showing more interest in Brazil, including the Carlyle Group, Warburg Pincus, Advent International and Southern Cross.

“Partnering with Patria will enable Blackstone’s limited partners and advisory clients to benefit from the fast expanding business opportunities in the country,” said Stephen Schwarzman, Blackstone’s chief executive.

Local newspaper Valor Econômico said Blackstone would pay $200m for 40 per cent of Patria, valuing the company at $500m.

Patria will be used as a platform for expansion in Brazil, a departure from Blackstone‘s strategy in India and China, where the company is building its own businesses.

Private equity activity in Latin America rebounded this year, with $3.8bn of new investments being made in the six months to June, more than all of last year, according to the Latin American Venture Capital Association. Brazil is by far the region’s biggest market and has attracted two-thirds of deals this year.

Latin American private equity groups raised $3.1bn in the first half, putting it on course to outstrip its fundraising record of $6.39bn in 2008.

Advent International raised $1.65bn for one of the biggest private equity funds in Latin America this year. Last week, Southern Cross completed the raising of its new $1.68bn Latin America fund.

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