Private Equity in Brazil: A Comparative Perspective

• Published in: The journal of private equity Vol. 9; no. 1; pp. 74 - 87
• Main Authors: de Mariz, Frédéric Rozeira, Savoia, José Roberto Ferreira
• Format: Journal Article
• Language: English
• Published: London Institutional Investor, Inc 01-12-2005; Pageant Media
• Subjects: Asset allocation; Business structures; Capital investments; Capital markets; Closely held corporations; Comparative analysis; Equity; Equity funds; Financial investments; GDP; Gross Domestic Product; Initial public offerings; Institutional investments; Internet; Investment companies; Investment funds; Investment policy; Investors; Market segments; Pension funds; Private equity; Privatization; Public private partnerships; Regulatory reform; Securities markets; Start up firms; Studies; Venture capital; Venture capital companies; Brazil; United States > US
• ISSN: 1096-5572; 2168-8508
• DOI: 10.3905/jpe.2005.605373

This article analyzes the evolution of the private equity and venture capital industries in Brazil, using the U.S. market as an ideal type. The main challenges faced by this sector in Brazil are the volatility of the economy, a lack of seed capital, and the illiquidity of capital markets, which make exit strategies through initial public offerings problematic. On the other hand, the decreasing level of real interest rates and the recent changes in the regulatory framework are the two main factors that bode well for the future growth of the sector. As a result, the authors believe Brazil will become one of the most important markets for private equity by the end of the decade.