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Margin Narrows for Top Spot in 2015/2016 LAVCA Scorecard on Private Equity & Venture Capital

14 July 2015

Caitlin Mitchell, LAVCA
[email protected]

Margin Narrows for Top Spot in 2015/2016 LAVCA Scorecard on Private Equity & Venture Capital
Increased Focus on PE/VC by Regulators Results in Multiple Downgrades but Overall Indicates Maturing Investment Environment

New York, July 14, 2015 – For the ninth consecutive year, Chile ranked first (with a score of 74) in the 2015/2016 LAVCA Scorecard, released today by the Latin American Private Equity & Venture Capital Association (LAVCA). However, this edition marks the first time since 2010 that the margin between the top spots narrowed to two points, with Brazil coming in a close second.

As PE/VC investing gains momentum in Latin America, with the emergence of new firms and record fundraising in 2014, policy makers in the region’s major economies have increased their focus on industry specific regulation.

“Policy makers have delved into more specific and complex issues, often with the intention of protecting local institutional investors from downside risk,” said Cate Ambrose, President of LAVCA. “In some markets, this dynamic contributed to downgrades on key indicators in the 2015/2016 Scorecard, but overall this is a signal of a maturing investment environment and regulators have engaged with industry participants expressing a willingness to continue revising and refining rules going forward.”

Broader tax reforms in particular had a negative impact on the indicator related to tax treatment of PE/VC for certain countries. Chile experienced a downgrade on tax treatment of PE/VC as a result of a tax reform passed in September 2014 which raised corporate taxes and closed some exemptions.

“In general, policies under the administration elected last year are reflective of an environment that is perceived to be less favorable to business and investors,” continued Ambrose.

Regulation specific to private investment remains a priority in Brazil, and securities regulator CVM is executing a detailed review of rules relevant to PE/VC. The country’s overall score (72) did not change from the last edition, despite projections of negative growth for 2015 and a corruption scandal.

Mexico ranked third with a score of 65. Reform initiatives in the country have advanced over the last year, including significant constitutional changes in the energy, financial, telecommunications, and education sectors, as well as reforms to the tax and political systems. A comprehensive tax reform implemented in 2014 is projected to have a negative impact on PE/VC, resulting in a downgrade on this indicator. But, Mexico’s score on bankruptcy procedures was upgraded, with a financial sector reform strengthening protections for creditors and other improvements.

For the first time in the history of the LAVCA Scorecard, Colombia’s overall score (60) decreased as a result of a downgrade on laws governing PE/VC fund formation and operations. The country was ranked fourth overall.

Jamaica was included for the first time in the 2015/2016 Scorecard, as a reflection of noteworthy efforts to develop the country’s investment and entrepreneurial ecosystem. Two countries, El Salvador and Trinidad & Tobago, were removed from the Scorecard due to lack of PE/VC activity.

The 2015/2016 LAVCA Scorecard is the first fully updated publication in the new bi-annual edition, with analysis and scores reflecting regulatory, policy, and market updates through mid-year 2015. The bi-annual frequency was adopted as a more accurate reflection of the pace of change in PE/VC industry regulation.

To download the full 2015/2016 Scorecard, click here. For information about LAVCA’s public policy efforts visit our website .


The Latin American Private Equity & Venture Capital Association (LAVCA) is a not-for-profit membership organization dedicated to supporting the growth of private equity and venture capital in Latin America. LAVCA’s membership is comprised of over 170 firms, from leading global investment firms active in the region to local fund managers from Mexico to Argentina. Member firms control assets in excess of US$60 billion, directed at capitalizing and growing Latin American businesses. For more information, visit

About The Economist Intelligence Unit

The Economist Intelligence Unit (EIU) is the research arm of The Economist Group, publisher of The Economist. As the world’s leading provider of country intelligence, it helps governments, institutions and businesses by providing timely, reliable and impartial analysis of economic and development strategies. Through its public policy practice, the EIU provides evidence-based research for policymakers and stakeholders seeking measurable outcomes, in fields ranging from gender and finance to energy and technology.


The Multilateral Investment Fund (MIF), member of the Inter-American Development Group, supports economic growth and poverty reduction in Latin America and the Caribbean through encouraging increased private investment and advancing private sector development. A central point of MIF’s mission is to serve as a laboratory for development, experimenting, innovating, and assuming risks to construct and support successful business models for microenterprise, small and medium businesses. The MIF has been a pioneer in venture capital (VC) in Latin America, launching its investments in 1999 when the industry was practically nonexistent. MIF’s support has been instrumental in developing this industry in the region. Over the course of its 16-year history, the MIF has approved more than 73 VC & seed funds for more than USD $276 million, of which over USD $200 million has been disbursed to funds investing in over 600 companies in 21 countries.

About EY

Value creation goes beyond the private equity investment cycle to portfolio company and fund advice. EY’s Global Private Equity Sector offers a tailored approach to the unique needs of private equity funds, their transaction processes, investment stewardship and portfolio companies’ performance. We focus on the market, sector and regulatory issues. If you lead a private equity business, we can help you meet your evolving requirements and those of your portfolio companies, from acquisition to exit, through a Global Private Equity network of 5,000 professionals around the world. Working together, we can help you meet your goals and compete more effectively.