RIO DE JANEIRO, April 7 (Reuters) - Advent International Corp, the private equity firm that last year raised the largest-ever Latin America-focused fund, is “really excited” by the outlook for activity in Brazil even as recent market and economic turmoil is hampering deals, a senior executive said on Tuesday.
The Boston-based buyout firm focuses on buying companies that it deems capable of doubling earnings within five years, said David Mussafer, Advent’s managing partner.
Private equity deals in Brazil are growing more complex, Mussafer said at an event sponsored by ABVCAP, the group representing private-equity and venture capital firms in Brazil. Advent increasingly relies on the knowledge of local staff to clinch deals, he told Reuters on the sidelines of the event.
“It’s a vibrant country, and we are very excited with it in spite of the headwinds,” Mussafer said, referring to Brazil. “Whatever the headwinds, our focus remains on the micro side of things: ‘What can we do to make this company grow?'”
Last month, Advent agreed to acquire for-profit university Faculdade da Serra Gaúcha in a deal marking its return to Brazil’s education industry. The company made four purchases in Latin America’s largest country last year, after raising a record $2.1 billion for Latin American buyouts.
Assets in the infrastructure sector, including those from engineering firms involved in a corruption scandal at state-controlled oil producer Petróleo Brasileiro SA, could be on Advent’s radar, Mussafer said. He did not elaborate.
Brazilian hospitals could also capture Advent’s attention, Patrice Etlin, an Advent senior partner in Brazil, said on the sidelines of the event.
While a recent sharp decline in Brazil’s currency might have made target companies more attractive, “in the long run things tend to average out” and returns become more correlated to the purchased company’s operational performance, he said.
Brazil remains the largest recipient of private-equity investments in Latin America, accounting for about 58 percent of the value of buyouts and 46 percent of the region’s deals.
Argentina may draw attention from funds too, Mussafer said. Banks and investors are hoping that a new president, who will be elected later this year, implements a more business-friendly economic framework.
“I‘m sure that some dislocations will come ... I’d like to see things improving in Argentina,” Mussafer added. (Editing by Matthew Lewis)