AIG Capital Partners has held the final close of its second Brazil special situations fund on $692 million (€434 million), exceeding its original $400 million target.
The fund will primarily invest in Brazil but will also pursue opportunistic investments in Mexico and Colombia, among other Central and South American countries.
“Brazil, Mexico and Colombia have seen tremendous growth over the past several years driven by the rising customer purchasing power, increased global trade and economic stability,” said Ana Vigon, the head of AIG Capital’s Latin American team, in a statement. “These strong fundamentals create attractive opportunities across the region particularly for private equity investing where the market is relatively underserved.”
The fund will target companies positioned to capitalise on the region’s growing domestic consumption and consolidation opportunities in sectors such as agriculture, natural resources consumer products and services, retail, financial services and manufacturing.
The fund held a first close in June 2007 following a launch in the third quarter of 2006. The investor base includes foundations and endowments, corporations, pension plans and family offices. AIG attributes its successful fundraising to the track record of its $215 million predecessor fund and the demand for Latin American investment opportunities, particularly in Brazil. AIG unit AIG Equity Sales served as the in-house placement agent.
Three investments totaling $112.5 million have been made out of Fund II to date. Investments in fabric manufacturer Providência and flower company Falcon Farms have been completed, while AIG has agreed to invest in farmland company Calyx Agro.
Emerging markets specialist AIG Capital, a member company of American International Group’s asset management unit AIG Investments, currently has Latin American offices in São Paulo and Mexico City with plans to open a third in Bogotá.
Last year, Brazil attracted some $4.7 billion in private equity investments, a 262 percent increase over the previous year, according to data from the Emerging Markets Private Equity Association.