Advent Said to Plan to Seek $2 Billion for Latin American Fund

Mar 26, 2014 6:32 pm ET

March 26 (Bloomberg) -- Advent International Corp. is seeking to deepen its investments in Latin America as three of the four biggest economies in the region are forecast to decelerate or contract in 2014 and after private-equity capital raising slowed last year.

The Boston-based private-equity firm, which has invested in Latin America since 1996, has indicated it plans to seek about $2 billion for its latest fund, according to two people familiar with the potential fundraising, who asked not to be identified because the information is private.

Advent has typically done leveraged buyouts and provided expansion capital to companies in Brazil, Mexico and Colombia. The firm will be seeking its sixth Latin America fund after private-equity fundraising for the region fell 30 percent to $6.1 billion in 2013 compared to the prior year, according to Preqin Ltd. data.

Dana Gorman, a spokesman at Abernathy MacGregor, declined to comment on behalf of Advent.

Brazil, which beats Mexico as Latin America’s largest economy, will slow this year as the region’s third- and fourth- biggest, Argentina and Venezuela, are set to moderate and contract respectively, according to the median estimate of analysts surveyed by Bloomberg. Mexico’s economic expansion will accelerate in 2014 after the government pledged to boost public spending and businesses increase exports to the U.S., according to the poll.

Deal Activity

Even as capital raising slowed, deal activity increased. Private equity and venture-capital firms committed $8.9 billion for 233 investments last year, a 13 percent increase from the year earlier period, according to data from the Latin American Private Equity and Venture Capital Association.

Advent is currently investing from its $1.65 billion fund raised in 2010. Advent Latin American Private Equity Fund V LP was generating a 1.1 times multiple on invested capital and a 5.1 net internal rate of return as of Sept. 30, according to performance data by the Washington State Investment Board. A 2007 fund was producing a 1.6 times multiple on invested capital and 14.6 percent net internal rate of return, the data shows.

Advent Purchases

In December, Advent and private-equity firm Alothon Group LLC agreed to sell Atmosfera Gestao & Higienizacao de Texteis SA, a Brazilian industrial laundry company, to Eurazeo SA’s Elis. That same month, Advent agreed to purchase a minority stake in Oleoducto Central SA, which manages a crude oil pipeline in Colombia, from Talisman Energy Inc.

The Latin America team, with offices in Sao Paulo, Mexico City and Bogota, has more than 35 investment professionals, according to the firm’s website. It lists Patrice Etlin, Juan Carlos Torres, and Juan Pablo Zucchini as managing partners in the region. When the firm raised its last fund, Ernest Bachrach and Torres were co-heads of the group. Bachrach is now special partner, according to the firm’s website.

Advent also manages funds that invest in the U.S. and Europe. In 2012, it raised 8.5 billion euros ($11.8 billion) for Advent International GPE VII LP.