Overview of the Brazilian Private Equity and
Venture Capital Industry
ABVCAP Conference: Brazil Post-Crisis, even better!
April 12 /13, 2010 – Sofitel – Rio de Janeiro
Prof. Cláudio Vilar Furtado
GVcepe – Private Equity and Venture
Capital Research Center at FGV – EAESP
Graduate School of Business
Special Thanks to our
Special Thanks to our
Sponsors and Partners
Sponsors and Partners
Founding Members
Strategic and Institutional
Founding Members
Strategic and Institutional
Partnerships
Research Structured in 3 Modules:
Managers
$
$
PE&VC 2010 Census
Research Structured in 3 Modules:
Managers
•
Managers:
profile,
investment thesis and legal
•
Invested companies:
$
$
PE&VC 2010 Census
Investors
Inv. Vehicles
Portf. Companies
investment thesis and legal
nature and human resources
•
Investments Vehicles:
Fundraising, LP’s and
Investments and Exits
•
Invested companies:
Stage, Sector, Location,
Size, Turnover, Employment,
etc.
PE&VC in Brazil – Dec/2009
Investors
Investors
Managing
Managing
US$ 34 bn
Committed Capital
140 PE&VC Firms
Managing
Organizations
Managing
Organizations
Portfolio
Companies
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
Research Universe
78%
of the industry
surveyed
180
PE&VC
Managing
Organizations
140
surveyed
Increasing Presence of Global Players
Global, Regional and Emerging Markets
Investment Vehicles
DLJ
Actis Autonomy Spinnaker
AIG Private Equity (EUA)
Darby Overseas (EUA)
Electra Capital Partners (Cayman)
Franklin Templeton (EUA)
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
Franklin Templeton (EUA)
Intel Capital (EUA)
Itacaré (Ilh Vir)
Santander (ESP)
Standard Bank (SAF)
The Carlyle Group (EUA)
Vita Bioenergia (SUI)
Southern Cross
Committed Capital Allocated to Brazil
current US$ bn
22 24 28 29 28 28 30 32 34 25 30 35 4021%
increase: 2009/2008
NOTE: Allocated committed capital excludes fully divested vehicles and includes REAL appreciation effect on dec/08 base.
4 5 5 5 5 6 8 13 0 5 10 15 20
1.7%
1.7%
2.2%
Significant Expansion of the
PE Asset Class in Brazil
2x
since 2004
Committed Capital as % of GDP
0.6%
0.8%
0.9%
0.9%
0.9%
1.0%
0.9%
1.2%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Fundraising 2009 US$ 4.6bn: Domestic
R$ 3.3bn (US$1.7bn) and Foreign US$ 2.9bn
current US$ bn
24.2 20 25 30 2.3 5.3 7.2 4.6 4.8 n/a n/a 2.8 3.6 3.5 9.9 0 5 10 15 2005 2006 2007 2008 2009 TotalFundraising
Investments
Broad Diversification of Investor Base, notably
Pension Funds, Parent Orgs., GPs, Family Offices, etc.
Pension Funds
22%
Funds of Funds
6%
Parent
Organizations
16%
Others 2%Private Companies
4%
Banks
10%
Investment Funds
7%
Trusts and
Endownments
7%
Insurance Companies 2%Government and state-owned companies 3%
Partners of the
PE&VC organization
11%
Multilateral Institutions 1%Family Offices
9%
6%
LATIN AMERICA 0.44% ENGLAND 1.84% EUROPE 6.93% MIDDLE EAST 1.07% ASIA 1.21% OTHER 2.43%
Origin of Investors as % of Committed Capital 2009:
high concentration in Brazil, U.S. and E.U
BRAZIL 60.49% USA
25.58%
Increasing Span of GP activity into both
Private Equity and Venture Capital
Distribution of Investment Vehicles by Type
PIPE 7% Mezanino 3% Greenfield 1%
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
More than one 38% Private Equity 28% Venture Capital 23% 7%
500
600
Strong Expansion of Portfolio Companies,
predominantly SMEs
14%
p.a.
CAGR 2005-2009
Nr. of Portfolio Companies
283
323
392
480
554
0
100
200
300
400
2005
2006
2007
2008
2009
Portfolio Companies 2009 by Sector of Economic Activity
Innovative and
Technology based
sectors predominate
1.
Industry
2009
Nr.
%
IT and Electronics
108
19,5
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
Spread in Traditional
industries
2.
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
Unidentified Sector
51
32
9,2
5,8
TOTAL
554
100%
Mobilizers programs in strategic areas
Complexo Industrial da Saúde Nuclear Energy Tecnologias de Informação e Comunicação Industrial Complex Defense Nanotecnologia BiotecnologiaPrograms to consolidate and expand the leadership
Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotecnologia Nanotecnologia Complexo Industrial da Saúde Tecnologias de Informação e Comunicação Biotechnology Nanotechnology Industrial Complex Health Technology Information and Communication
4/6
7/7
PE & VC PORTFOLIO COMPANIES IN 24/26 SECTORS
Private Equity and Venture Capital Investment Activity leverages Industrial
Development Policy: presence in 90% of priority government programs
Programs to strengthen the competitiveness
Complex
Automotive Capital goods
Textile and Clothing Madeira and Mobile Higiene, Perfumaria e Cosméticos
Construção Civil Complexo de Serviços Biodiesel
Industry Naval and Cabotage
Leather, Footwear and
Artifacts Agroindústrias Plastics OUTROS
Programs to consolidate and expand the leadership
Complexo
Aeronáutico Mineração Steel Pulp and Paper
Petróleo, Gás natural e Petroquímica Meat Bioetanol Complexo Aeronáutico Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Bioetanol Petróleo, Gás natural e Petroquímica Complexo
Aeronáutico Bioetanol Mineração
Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Higiene, Perfumaria e Cosméticos Mineração Bioetanol Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Construção Civil Higiene, Perfumaria e Cosméticos Mineração Bioetanol Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Complexo de Serviços Construção Civil Higiene, Perfumaria e Cosméticos Mineração Bioetanol Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Agroindústrias Complexo de Serviços Construção Civil Higiene, Perfumaria e Cosméticos Mineração Bioetanol Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Biodiesel Agroindústrias Complexo de Serviços Construção Civil Higiene, Perfumaria e Cosméticos Mineração Bioetanol Petróleo, Gás natural e Petroquímica Complexo Aeronáutico Education and OTHERS Biodiesel Agribusiness Complex Services Building Hygiene, Perfumery and Cosmetics Mining Bioethanol Oil, Natural gas and
Petrochemicals Complex
Aeronautical
13/13
Brazilian PE&VC on the Radar Screen of Global Investors
Global Fundraising (US$bn)*
Region
2005
2006
2007
2008
2009
Total
North America
187
315
383 366
144
1,397
Europe
110
136
162
157
73
640
*Preqin **GVcepeEurope
110
136
162
157
73
640
Asia and ROW
47
84
100
112
27
371
Global
345
535
646
636
246
2,408
Brazil**
2.3
5.3
7.2
4.6
4,8
24
Brazilian PE&VC on the Radar Screen of Global
Investors: Employment
Country
Estimated Total Employment
US
38.500
UK
7.700
France
2.300
Brazil (GVcepe correction)
1.700
Germany
1.500
Australia
1.400
Canada
1.400
Japan
1.100
Source: Preqin, Gvcepe
Japan
1.100
India
1.000
Hong Kong
900
Switzerland
900
China (ex. Hong Kong)
800
Italy
800
Sweden
800
Israel
600
Netherlands
600
Other
8.800
Total
69.100
Research Structured in 3 Modules:
Managers
•
Legal structure and LP
agreements
•
Investors an LPs:
resources
origin and category
•
GP:
Legal structure and
remuneration
•
Performance by
Investment Vehicle
Vintage, Exits, etc.
RESEARCH MODULE 2
$
$
PE&VC 2010 Census
Research Structured in 3 Modules:
Managers
RESEARCH MODULE 3
•
Growth and value creation,
jobs and intangibles
•
Patents and Innovation
•
Corporate governance and
financial contracts
•
Social and Enviromental
Sustainability
•
Exits and Capital Markets
Impact
$
$
PE&VC 2010 Census
Investors
Inv. Vehicles
Portf. Companies
Your cooperation is crucial to
our joint success!!!
Thank
Thank you
you
ABVCAP Conference: Brazil Post-Crisis, even better!
April 12 /13, 2010 – Sofitel – Rio de Janeiro
Thank
Thank you
you
Prof. Cláudio Vilar Furtado
GVcepe – Private Equity and Venture
Capital Research Center at FGV – EAESP
Graduate School of Business
