Investors believe the overall risk/return equation for Latin American private equity is improving, though conditions in Brazil are more challenging, according to the annual Coller Capital/LAVCA Latin American Private Equity Survey.
According to the survey, more than half of investors say Mexico, Pertu and Colombia will provide very attractive markets for investment in the next two years. More than half of domestic and international investors expect net annual returns of 16 percent or higher from Latin American private equity overall. Almost three quarters of investors expect their private equity commitments in Mexico, Peru and Colombia to deliver annual net returns of more than 16 percent, and half of them expect this level of return from Brazil and Chile.
Over a third of existing investors expect to accelerate their new fund commitments to Latin American private equity, the survey said, although they believe challenges have grown since last year, particularly in terms of the region’s political climate, dealflow and entry valuations.