PE Hunkers Down

by Dan Shirai Owners of private companies across the region have sobered up to a new reality when it comes to capitalizing assets or cashing in equity chips. Especially in Brazil, where an IPO boom had managers focused on public market paydays, the dream of selling an equity stake at an inflated valuation is long gone. Owners are resizing expectations – no doubt fueled by fee hungry bankers – to what private equity investors say are more reasonable levels. “People are finally going to face reality,” says Julio Marquez, head of LatAm at GEM, which manages $3 billion in EM assets, including a $150 million Colombia fund. “Between 2002 and 2008, people were ignoring reality,” he adds. In the first half of 2008, LatAm dedicated strategies raised $1.3 billion in new equity, roughly in line with the $1.4 billion raised in the corresponding period of 2007,...