Let’s Try That Again

Jul 1, 2011

European funds are increasingly eyeing LatAm PE in an effort to gain exposure to the growth in middle class consumption. But can they avoid the mistakes of the past?

by Jef Cozza
LatAm’s macroeconomic growth story over the last several years is now a familiar one. But for European investors seeking exposure to the growing class C, as the region’s middle class segment is called, options are limited. Private equity is often the best and sometimes only way of fulfilling such needs and as a result is generating considerable interest among Europeans.

“The stock exchanges are quite small, and there’s not lots of listed companies on them,” says Sven Soderblom, a partner with Spanish firm Arcano Group’s asset management division which is also involved in private equity. Arcano has about $1.4 billion assets under management, with about 10%-15% in LatAm.

Most exchanges in LatAm still tend to be heavily weighted toward companies in the natural resources sector, and offer little in the way of consumer and retail...

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