Private Equity
Private Equity
Note: This collection provides the cross-border legal guidance necessary for law firms, other professionals, businesses, governments, and high net worth individuals to operate globally. It seeks to cover the areas of law that matter most to these audiences and to answer the legal questions that are being asked around the world today. This collection covers key areas of law, reflecting the evolution of law alongside the global economy and socio-political developments.
Introduction
After a significant slowdown in global private equity activity following the recent economic crisis, private equity and venture capital investing activity in Latin America reached new highs. By some accounts, annual private equity investments in 2010 rose by more than US$14 billion over 2009.
Attracting investors by factors such as favourable macroeconomic and fiscal fundamentals, strong growth of the middle class and the growing participation of private pension fund systems across the region, firms investing in the region raised a record of US$8.1 billion in 2010 (more than twice than in 2009). All of this makes prospects for future investment activity strong and the need for deep local expertise and relationships greater than ever.
Sophisticated investors recognise that Latin American private equity markets present distinct issues compared to historical private equity practices in other regions and that market characteristics (and related benchmarks for private equity investment) differ from country to country. Recent experience means that more investors are now coming to the table with first-hand local knowledge and a better understanding of local risk, moving away from generic approaches to building value at portfolio companies.This section seeks to highlight ways in which investors can identify, evaluate and mitigate risks specific to, and benefit from, unique structures or regimes available in certain jurisdictions.
We hope this will provide an overview of how investors can successfully execute their strategies by identifying appropriate country-specific deal structures. In addition to providing such exper tise, there are also significant oppor tunities for local counsel to help manage diligence and transaction costs in practice in a manner that will promote the development of robust and competitive private equity markets. These are just some of the ways local legal practitioners can play an important role in furthering private equity activity in the region.
International lawyers, on the other hand, continue to add value with broad-based knowledge of transaction structures and decades of experience implementing innovative solutions. In addition, as debt financing and leveraged buyouts become more important in the Latin American private equity landscape, we can share success stories and pitfalls learned in international debt markets. International lawyers are most effective when combining this experience with the specialised guidance of local private equity lawyers to structure investments that address particular jurisdictional limitations or opportunities. In the end, we hope that the continuing effort on all sides to structure and implement deals in a thoughtful and tailored manner will further the growth of private equity investment in the region.