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Energy, infrastructure and retail are currently the most appealing sectors for private equity funds and venture capital investments in Latin America, Latin American Venture Capital Association (LAVCA) research director Ramona DeNies told BNamericas.

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LAVCA sees energy, infra, retail as hottest LatAm sectors

April 12, 2007 — Energy, infrastructure and retail are currently the most appealing sectors for private equity funds and venture capital investments in Latin America, Latin American Venture Capital Association (LAVCA) research director Ramona DeNies told BNamericas.

Venture capital and private equity fund investments in Latin America jumped more than 400% in 2006 to US$4.25bn due to strong growth in both fundraising and deals, she said.

However, the figures still do not reach the US$5bn registered in 1998, when a crash caused the market to shrink to about US$1bn annually in the 2001-05 period.

“Today, investor confidence in the region is surging thanks to interest from both international and local investors, who are much more sophisticated and knowledgeable about the region than in prior years,” DeNies said.

Last year, the region saw spectacular exits, growth of IPO markets, strong fundraising and increasing local investor participation, she said.

The association will keep pushing to improve the regulatory environment in the region, she said.

In January, LAVCA began managing a US$500,000 grant from the Inter-American Development Bank’s Multilateral Investment Fund (MIF) to strengthen the venture capital industry in Latin America and the Caribbean.

LAVCA will coordinate with local venture capital associations to foster the development and competitiveness of SMEs in the region.

By month-end, LAVCA will issue its 2006 scorecard on the regional investing environment, which includes improved scores for 6 of the 12 nations ranked, DeNies said.

LAVCA was created in 2002 by venture capital funds active in Latin America and the Caribbean.