Chile Stays On Top Despite Score Slip – Trinidad and Uruguay Leap Forward
May 15, 2007 | Chicago, United States – With 2006 regional fundraising levels doubled – and investment levels quadrupled – investor confidence has clearly grown in Latin America and the Caribbean (LAC) as a destination for international venture capital and private equity (VC/PE). Many investors are intrigued by recent spectacular exits from the region, while others note industry-specific legislation and increasing participation from local pension funds.
The region’s nascent VC/PE industry shows momentum, but both international investors and local policymakers are increasingly aware that appropriate business environments are needed to sustain positive industry growth. The recently launched 2nd Annual Scorecard on the Venture Capital and Private Equity Environment in Latin America and the Caribbean charts regional strengths and weaknesses to reveal the potential for growing VC/PE in the region.
The Annual Scorecard – which tracks developments in 12 LAC nations – is produced for the Latin American Venture Capital Association (LAVCA) by the Economist Intelligence Unit (EIU).
2007 scores – based on a matrix of 12 criteria – demonstrate progress in many countries to promote VC/PE, but reveal that the region as a whole is held back by broader problems including weak judicial systems and international perceptions of corruption.
Key 2007 findings include:
Friendliness of business environments to VC/PE investments continues to vary sharply across the region.
Countries’ business environment rankings are associated in rough but important ways with local investment levels.
Changes are more likely in developed markets that already enjoy considerable activity and where there is thus a perception of further potential to be tapped through regulatory reform
There is considerable scope to lower barriers to institutional investors in VC/PE activities.