Peruvian fund picks up pace

Peru's Enfoca Investments has resumed fundraising for its third private equity fund focused on Peru and Colombia after a “pause” and is now nearing a $100 million first close expected imminently.

The Enfoca Discovery I Fund has been in the market targeting $150 million from international investors since October but took time out “given the uncertainties in the global financial markets”, according to Enfoca chief executive Jesus Zamora. The fund's commitments to date are largely from development institutions and funds of funds.

The fund's strategy will be the same as its two predecessors, which means it will target underpenetrated sectors growing at a faster rate than GDP, says Zamora. At the moment he is optimistic about investment prospects in retail, the construction of lowerincome housing, education and healthcare as well as services related to logistics and international trade.

Enfoca's six private equity investments to date include $12.5 million in home improvement retailer Maestro Home Center, $20.2 million in cancer-focused insurance and healthcare provider Oncosalud and $48.3 million in aviation services company Talma.

Zamora takes a cautious stance on the economic outlook for Peru and Colombia, which have experienced relatively robust economic growth in the face of floundering global markets. “Given they are open economies they will surely commence a downturn that will affect various sectors,” he explains, adding there will nonetheless continue to be sustained growth in some domestic sectors where pent-up demand within countries remains high.

Any decline in the local economy would create opportunities to purchase companies under duress and may lead to the divestment of Andean regional units of multinational companies. Enfoca does not use leverage while making platform investments, so claims to be unaffected by lack of credit. However, its portfolio companies have the capacity to use leverage for growth and regional expansion, says Zamora.

Enfoca was an early entrant to the fledgling private equity industry in Brazil. The firm was founded 10 years ago as a mergers and acquisitions boutique but even in its early years was introducing corporations and individuals to private equity investment opportunities on a club-deal basis. The firm founded an official fund management unit, Enfoca SAFI, in January 2007 to raise commingled funds.

Enfoca SAFI's debut vehicle was Enfoca Descubrir I which launched with $50 million in domestic capital, making it Peru's largest-ever investment fund at the time. The government and limited partners later allowed the fund to raise additional capital and it consequently increased its size to $160 million – $110 million of which has been invested to date.

Descubrir I was followed by The Enfoca Andean Investment fund, which was aimed at North American institutional investors and raised $110 million. This fund is now fully invested.

NICARAGUAN FUND INVESTS IN COSTA RICAN BEVERAGES
Nicaragua-based Lafise Investment Management has invested $750,000 in Costa Rican beverage producer Desinid Corporation through its private equity and venture capital fund CASEIF II. The fund invests only in companies with less than 300 employees and assets of no more than $10 million in Central America, Panama and the Domini c an Republic. Lafise invested $700,000 in common shares and $50,000 in a four-year term loan. Desinid's exports currently account for 60 percent of total sales. The investment will support its regional consolidation.

LOGISTICS DEAL FOR BRAZILIAN DEVELOPMENT UNIT
BNDESPar, the private equity arm of Brazil development bank BNDES, will take a 12.1 percent stake in Southeast Brazil-based LLX Logística as part of a $266 million capital increase. BNDESPar will purchase a quarter of LLX's 333.3 million new common shares for roughly $65 million. LLX was established in March 2007 to provide logistics services, particularly in the ports sector, though two private port terminals.

AUREOS MAKES THIRD MEXICAN INVESTMENT
Emerging markets-focused private equity firm Aureos Capital has invested $10 million in Mexican IT company Grupo MetroNet to enable the purchase of a rival. MetroNet allows businesses to outsource their IT, telecommunications and connectivity functions. The investment is Aureos's third in Mexico and was made from the Aureos Latin America Fund I. The capital will be used to acquire Mexico City-based data services provider Diveo.

INVESTMENT IN LATIN AMERICA ON THE DECLINE
Although fundraising for private equity in Latin America rose from $4.7 billion in 2007 to $5.8 billion in 2008, investment levels declined from $7.5 billion to $3 billion according to Venture Equity Latin America's 2008 year-end report. While investment in Brazil and Mexico dropped sharply, the Andean region saw a marked rise from $377 million in 2007 to $973.6 million in 2008.

BANK OF BRAZIL TEAMS WITH CARLYLE
The Bank of Brazil and The Carlyle Group have formed a partnership in which the bank will raise between R$500 million (€165 million; $222 million) and R$1 billion from large Brazilian investors for a fund to be managed by Carlyle. Bank of Brazil will participate in the investment decisions of the fund, which is targeting the internationalisation of Brazilian companies.

WASHINGTON COMMITS $100M TO ADVENT FUND
The $67.6 billion Washington State Investment Board has committed $100 million to Advent Latin American Private Equity Fund V. The firm's fourth Latin American fund closed on $1.3 billion in 2007, which Advent said is the region's largest private equity fund. Washington State committed $25 million to that fund, and made a prior €100 million investment to Advent International Global Fund VI, which closed on $10.4 billion last year.

MONOMOY CAPITAL BUYS MEXICAN PLASTICS ADD-ON
US-bas ed pr ivate equity firm Monomoy Capital Partners has acquired Moll Ramos from Moll Industries as an add-on to the firm's plastics platform, Fortis Plastics. Moll Ramos operates an injection moulding facility in Ramos Arizpe, Mexico, which serves Mexican and US appliance makers. The value of the deal was not disclosed.

PANAMA GP BACKS COLOMBIAN FORESTRY FIRM
Panama-based private equity firm Grupo ECOS has acquired a 35.5 percent stake in Colombian forestry services provider Silvotecnia for an undisclosed sum. The investment comes from Grupo ECOs's Ecos Forestry Fund. Silvotecnia was launched in Medellin in 1999 and offers integrated services in the silviculture sector including managing forestry plantations and natural forests and providing environmental, consulting and general forestry industry advisory services.

BANK OF AMERICA SHUTS MERRILL LYNCH PRIVATE EQUITY ARM IN BRAZIL
Bank of America has reportedly shut down the Brazilian private equity operations of global financial services firm Merrill Lynch, which it acquired in January 2009. The firm will continue its investment banking operations in Brazil, where it retains more than 150 employees. The closure of the Brazilian private equity arm is consistent with Bank of America's intention to centralise its global private equity operations in New York, London and Singapore.