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Colombia and Peru Make Gains in Investment Environment for Private Equity and Venture Capital

16 July 2009

Chile and Brazil maintain lead positions in 2009 Scorecard published by the Latin American Venture Capital Association

Government efforts to promote private capital investment in Colombia and Peru have had a measureable impact, according to the 2009 Scorecard on the Private Equity and Venture Capital Environment in Latin America released by the Latin American Venture Capital Association (LAVCA). The annual Scorecard, which was first published in 2005, ranks 12 countries based on indicators including taxation, minority shareholder rights, restrictions on institutional investors and capital markets development.

Colombia made the greatest gains in the 2009 ranking, thanks to the efforts of regulators who have worked to improve the legal framework for private capital initiated in 2007, and specific gains in corporate governance and minority shareholder rights. An advance was also seen in Peru, where the country’s banking superintendent passed regulation allowing pension funds to invest in private capital funds managed by both global and local investment firms.

Eduardo Elejalde, who manages LAEFM in Colombia in addition to serving as Chairman of LAVCA, comments that “the reforms passed in Colombia in 2007 represented an important step forward in the legal framework for PE and VC funds, and the effects can be seen in the expansion of funds operating in the country.”

Chile led the ranking for the fourth consecutive year, largely as a reflection of the country’s institutional framework and high scores in protection of intellectual property rights, judicial system and low corruption. Most recently Chilean state development bank CORFO has significantly expanded programs and capital available for early stage investors in the country.

The 2009 Scorecard reflects Brazil’s move to within one point of Chile, with improvements in the quality of international accounting standards established under regulations passed in December 2007. Fund managers in Brazil have been particularly active in pushing for ongoing improvements in tax laws and other rules affecting the country’s PE/VC industry, and dozens of new funds have been established in recent years.

Cate Ambrose, President and Executive Director of LAVCA, comments “global investors are turning their attention towards Latin America, as the region’s key markets are faring well compared to other developed and emerging economies. Good public policy and investor-friendly regulation are a critical factor in distinguishing where to commit capital. We see high-level political support in Brazil, Chile, Mexico, Colombia and Peru.”

In exclusive preview coverage of the 2009 LAVCA Scorecard published in VentureBeat (,Tim Draper, managing director of Silicon Valley firm Draper Fisher Jurvetson, was quoted as saying “The Scorecard is so cool. It’s so important for governments to see how they rank relative to others as attractors of capital, entrepreneurship and business people. It’s useful to businesses that want to expand to Latin America. We need these reports all over the world.”

The 2009 Scorecard was produced in collaboration with the Economist Intelligence Unit, the Multilateral Investment Fund and the Andean Development Corporation. It is available for download on the LAVCA website:

For more information, contact Emma Epstein at
[email protected]

The Latin American Venture Capital Association (LAVCA) is a not-for-profit membership organization representing dedicated to supporting the growth of the private equity and venture capital industry in Latin America and the Caribbean. Its members include the leading global investment firms active in the region, as well as local firms from Mexico to Argentina. LAVCA’s mission–to spur regional economic growth by advancing venture capital and private equity investment–is accomplished through programs of research, networking, education, the promotion of best investment practices, and the advocacy of sound public policy. Learn more at

About MIF
The Multilateral Investment Fund (MIF) has as one of its primary goals the promotion of inclusive growth through private sector development. An independent trust fund administered by the Inter-American Development Bank, MIF has been a pioneer in the Region for seed and venture capital investments. Through the funds in which MIF invested, over 300 small businesses and start-ups have received long-term equity financing and this has been translated into job creation and direct benefits to the countries’ economies. Learn more at

About CAF
The Andean Development Corporation (Corporación Andina de Fomento, CAF) is a multilateral financial institution that mobilizes resources from international markets to Latin America, in order to provide multiple banking services to both public and private clients of its shareholder countries. The Institution is committed to sustainable development and regional integration. CAF is the main source of multilateral financing of the Andean region. Likewise, during the last five years, the Institution has strengthened its presence in Latin America, particularly in projects that contribute to regional integration. Learn more at

About the Economist Intelligence Unit
The Economist Intelligence Unit is the world’s foremost provider of country, industry and management analysis. Founded in 1946 as a business unit of the Economist Group, publisher of The Economist magazine, the Economist Intelligence Unit is now a leading research and advisory firm with more than 40 offices worldwide. Learn more at