PineBridge looks beyond Brazil for LatAm private equity profits

The alternative investment industry is often regarded as ‘thinking differently’, but even within that community, some managers are taking alternative routes to making money for clients. The Latin American portion of PineBridge’s global private equity team is arguably one of them.

The global team has about $6bn invested in about 325 underlying managers.

In Latin America, it actively looks beyond Brazil, which some European allocators may regard as the be-all and end-all of Latin American private equity; it is willing to consider ‘first-time managers’, albeit with some significant caveats; and since January it has searched for local managers from a regional base in Mexico, complementing the global private equity team’s other offices in New York, London, Zurich and Hong Kong.

Alejandro Rodriguez (pictured), senior associate on PineBridge’s Latin American private team and founder of its Mexico City office, says it may not be imperative to look beyond Brazil, which represents about 80% of Latin America’s private equity industry – but allocators who make the effort to do so can find interesting opportunities others will miss.

“We recognise Brazil is not the only place with private equity opportunities in Latin America – we try to find opportunities outside Brazil as well.”

Rodriguez says the region overall has about 100 funds that PineBridge could invest in and while Brazil is home to many of them – it will represent some 40% to 50% of their investments in the region – they also look to Mexico, Colombia, Peru and Chile for managers.

“Brazil is a great growth story in the long-term, but we do not necessarily think in the short-run.” Rodriguez says there has been “a lot of capital formation”, and especially at the larger end of the market of funds that have raised $1bn or more over the past three years, “and it has to be put to work over the next years.

 

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