How To Make A Profit From Investment In Brazilian Business

Transcription

1 Overview of the Brazilian Private Equity and Venture Capital Industry Prof. Cláudio Vilar Furtado GVcepe Private Equity and Venture Capital Research Center at FGV EAESP Graduate School of Business ABVCAP Conference: Brazil Post-Crisis, even better! April 12 /13, 2010 Sofitel Rio de Janeiro

2 Special Thanks to our Sponsors and Partners Founding Members Strategic and Institutional Partnerships Institutional Sponsorship

3 Research Structured in 3 Modules: Managers $ $ Investors Inv. Vehicles Portf. Companies PE&VC 2010 Census

4 Research Structured in 3 Modules: Managers: profile, investment thesis and legal nature and human resources Investments Vehicles: Fundraising, LP s and Investments and Exits Managers $ $ Invested companies: Stage, Sector, Location, Size, Turnover, Employment, etc. RESEARCH MODULE 1 Investors Inv. Vehicles Portf. Companies PE&VC 2010 Census

5 PE&VC in Brazil Dec/2009 Investors US$ 34 bn Committed Capital Managing Organizations Portfolio Companies 140 PE&VC Firms 236 Investment Vehicles 1,747 Professionals and Staff 554 Portfolio Companies From 2005 to 2009: 489 new/follow-on investments 37 backed IPO s (R$31.3bn)

6 Research Universe 78% of the industry surveyed 180 PE&VC Managing Organizations 140 surveyed

7 Increasing Presence of Global Players Global, Regional and Emerging Markets Investment Vehicles Global, Regional and Emerging Markets Fund Managers with vehicles strictly dedicated to Brazil AAI Global Advent AIG Cartesian Cartica Capital Darby Overseas Econergy Brasil General Atlantic Intel Capital One Equity Partners Paul Capital The Carlyle Group DLJ Actis Autonomy Spinnaker GP Investments AIG Private Equity (EUA) Darby Overseas (EUA) Electra Capital Partners (Cayman) Franklin Templeton (EUA) Intel Capital (EUA) Itacaré (Ilh Vir) Santander (ESP) Standard Bank (SAF) The Carlyle Group (EUA) Vita Bioenergia (SUI) Southern Cross

8 Committed Capital Allocated to Brazil % increase: 2009/ current US$ bn mar/08 jun/08 sep/08 dec/08 mar/09 jun/09 sep/09 dec/09 NOTE: Allocated committed capital excludes fully divested vehicles and includes REAL appreciation effect on dec/08 base.

9 Significant Expansion of the PE Asset Class in Brazil Committed Capital as % of GDP 2x since % 1.7% 2.2% 1.2% 0.6% 0.8% 0.9% 0.9% 0.9% 1.0% 0.9% Source: BACEN, GVcepe

10 Fundraising 2009 US$ 4.6bn: Domestic R$ 3.3bn (US$1.7bn) and Foreign US$ 2.9bn 30 current US$ bn n/a n/a Total Fundraising Investments

11 Broad Diversification of Investor Base, notably Pension Funds, Parent Orgs., GPs, Family Offices, etc. Parent Organizations 16% Others 2% Pension Funds 22% Funds of Funds 6% Family Offices 9% Multilateral Institutions 1% Partners of the PE&VC organization 11% Government and stateowned companies 3% Insurance Companies 2% Trusts and Endownments 7% Private Companies 4% Banks 10% Investment Funds 7%

12 Origin of Investors as % of Committed Capital 2009: high concentration in Brazil, U.S. and E.U MIDDLE EAST 1.07% ASIA OTHER 1.21% 2.43% LATIN AMERICA 0.44% ENGLAND 1.84% EUROPE 6.93% USA 25.58% BRAZIL 60.49% Sample: 255 reporting vehicles, ¾ of Committed Capital

13 Increasing Span of GP activity into both Private Equity and Venture Capital Distribution of Investment Vehicles by Type Mezanino 3% Greenfield 1% PIPE 7% Venture Capital 23% More than one 38% Private Equity 28% Obs: Venture Capital includes Seed, Early Stage and Later Stage VC. Private Equity includes Growth Capital and Later Stage Sample: 224 vehicles, 88% of population

14 Strong Expansion of Portfolio Companies, predominantly SMEs Nr. of Portfolio Companies %p.a. CAGR

15 Portfolio Companies 2009 by Sector of Economic Activity Innovative and Technology based sectors predominate Spread in Traditional industries Industry 2009 Nr. % IT and Electronics ,5 Energy and Oil 54 9,7 Civil Construction 52 9,4 Communications 34 6,1 Retail 28 5,1 Agribusiness 25 4,5 Food and Beverages 21 3,8 Transportation and Logistics Services 21 3,8 Pharmaceuticals, Medical and Aesthetics 20 3,6 Financial Services 18 3,2 Biotechnology 15 2,7 Infrastructure 15 2,7 Education 13 2,3 Entertainment/Tourism 11 2,0 Services (Other) 11 2,0 Real Estate 9 1,6 Metallurgy, Mechanical and Electrical Material Industries 7 1,3 Extractive Industries 6 1,1 Chemical Industries 3 0,5 Other Industrial and Services 51 9,2 Unidentified Sector 32 5,8 TOTAL %

16 Private Equity and Venture Capital Investment Activity leverages Industrial Development Policy: presence in 90% of priority government programs PE & VC PORTFOLIO COMPANIES IN 24/26 SECTORS Mobilizers programs in strategic areas 4/6 Complexo Industrial Health da Saúde Industrial Complex Tecnologias Technology de Information Informação and e Communication Comunicação Nuclear Energy Industrial Complex Defense Nanotecnologia Nanotechnology Biotecnologia Biotechnology Programs to consolidate and expand the leadership 7/7 Complexo Aeronáutico Aeronautical Petróleo, Oil, Natural Gás natural gas and e Petrochemicals Petroquímica Bioethanol Bioetanol Mineração Mining Steel Pulp and Paper Meat Programs to strengthen the competitiveness 13/13 Complex Automotive Capital goods Textile and Clothing Madeira and Mobile Higiene, Hygiene, Perfumaria Perfumery and e Cosméticos Cosmetics Construção Building Civil Complexo de Serviços Services Industry Naval and Cabotage Leather, Footwear and Artifacts Education and Agroindústrias Agribusiness Biodiesel Plastics OUTROS OTHERS Source: GVcepe and ABDI - Productive Development Policy (PDP)

17 Brazilian PE&VC on the Radar Screen of Global Investors Global Fundraising (US$bn)* Region Total North America ,397 Europe Asia and ROW Global ,408 *Preqin **GVcepe Brazil** ,8 24 as % of Asia and ROW 4,8% 6,4% 7,2% 4,1% 17,6% 6,5%

18 Brazilian PE&VC on the Radar Screen of Global Investors: Employment Country Estimated Total Employment US UK France Brazil (GVcepe correction) Germany Australia Canada Japan India Hong Kong 900 Switzerland 900 China (ex. Hong Kong) 800 Italy 800 Sweden 800 Israel 600 Netherlands 600 Other Total Source: Preqin, Gvcepe

19 Research Structured in 3 Modules: Legal structure and LP agreements GP: Legal structure and remuneration Investors an LPs: resources Performance by origin and category Investment Vehicle Vintage, Exits, etc. Managers RESEARCH MODULE 2 $ $ Investors Inv. Vehicles Portf. Companies PE&VC 2010 Census

20 Research Structured in 3 Modules: Growth and value creation, jobs and intangibles Patents and Innovation Social and Enviromental Sustainability Corporate governance and Exits and Capital Markets financial contractsmanagers Impact RESEARCH MODULE 3 $ $ Investors Inv. Vehicles Portf. Companies PE&VC 2010 Census

21 Your cooperation is crucial to our joint success!!! Thank you Prof. Cláudio Vilar Furtado GVcepe Private Equity and Venture Capital Research Center at FGV EAESP Graduate School of Business ABVCAP Conference: Brazil Post-Crisis, even better! April 12 /13, 2010 Sofitel Rio de Janeiro