Geopolitical & Socioeconomic

Canning Paper Briefing: Private Equity in Latin America - Technology and Transformation

  • SCI Belgrave Square, 14/15 Belgrave Square, London

This round-table is in conjunction with a Canning Paper that we are releasing on this subject. In theory, the economic and financial environment across Latin America has improved dramatically over the last year. In no particular order, we have seen: Argentina’s return to global capital markets with the largest ever Emerging Markets sovereign bond issue; effectively a new and more pro-business government in Brazil, at a time that that economy may be passing through a cyclical trough; some growth in Mexico thanks to the ongoing recovery in the United States; very substantial progress towards a lasting peace deal between Colombia’s government and FARC; trialing of (what is effectively) the new Panama Canal - which will have a large and positive impact on shipping costs; and the election of technocratic President Pedro Pablo Kuczynski in Peru.

This round-table is in conjunction with a Canning Paper that we are releasing on this subject.

In theory, the economic and financial environment across Latin America has improved dramatically over the last year. In no particular order, we have seen: Argentina’s return to global capital markets with the largest ever Emerging Markets sovereign bond issue; effectively a new and more pro-business government in Brazil, at a time that that economy may be passing through a cyclical trough; some growth in Mexico thanks to the ongoing recovery in the United States; very substantial progress towards a lasting peace deal between Colombia’s government and FARC; trialing of (what is effectively) the new Panama Canal - which will have a large and positive impact on shipping costs; and the election of technocratic President Pedro Pablo Kuczynski in Peru.

In practice, there is little evidence that the economic cycle has had any impact on Private Equity flows over the years. Since 2008, there has been only one calendar year (2011) in which capital raisings by Latin America-focused PE funds have exceeded US$10bn. PE investment has been insignificant in terms of total FDI. In 2015, for instance, inwards flows dropped by 9.1% to US$179.1bn.

Focus Area 1 - Renewable Energy Sources:

Demand for power is increasing across the region. New generating capacity has to be built, in part because of past under-investment. Where, in terms of country and energy source, appear to be the most attractive opportunities?

Focus Area 2 - Financial Inclusion:

What kind of initiatives are being undertaken by established financial institutions, technology innovators and NGOs to promote financial inclusion across the region? What are the changes to look for?

Focus Area 3 - Payments:

What kind of initiatives are being undertaken by established financial institutions, technology innovators and NGOs to reduce the cost of payments across the region? What are the changes to look for?

The paper's findings will be presented by Chris Principe, CEO at FinFuture, Inc; an international trade and trade finance expert.

This event is intended for corporate members of Canning House, if you would like to attend please send expressions of interest to [email protected].

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