Brazil Private Equity
Citigroup Invests $500 Million in Brazil Private Equity
Citigroup Inc. is going to invest up to $500 million in Brazilian private equity. This decision comes after the New York-based firm sold stakes in several companies including Brasil Telecom Participacoes SA.Paulo Caldeira, the managing director for the $3.4 bil Citigroup Venture Capital International fund, commented on the investments in Brazil. “It is a time that you need to watch out what is there. There are lots of investments that can be made there, valuations have been revised, but you need to watch out in terms of the preservation of the value.” Caldeira also said that Citigroup is looking at investments in Brazilian agricultural business, services, infrastructure, financial services and entertainment; but he did not name any companies.
The global credit crisis has forced Citigroup to exit its primary investments in Brazil, selling its shares in firms including: Brasilia-based Brasil Telecom Participacoes, Telemig Celular Participacoes SA and Amazonia Celular SA, Companhia Docas do Estado de Sao Paulo, known as Porto de Santos, and Metro Rio, the operator of the Rio de Janeiro subway system, according to Caldiera. Those investments were made by Citigroup's Venture Capital Investment Brazil Fund.
From Bloomberg:
“Watch out for exits also,” Caldeira said, adding that the market for initial public offerings in the country dried up after dozens of companies went public in 2007. The fund is interested in strategic sales, he said.
Citigroup is also looking at distressed companies, or those being sold at a discount, such as sugar and ethanol producers and mills. “It is tough, but it is where you can get incredible returns,” Caldeira said.
Brazil, Latin America's biggest economy, IPOs have declined significantly from the global credit crisis; with only four IPOs last year compared to 64 in 2007. No Brazilian firms have gone public this year, according to recent data.
Tags: Private equity Brazil, Brazilian Private Equity, Brazil Venture Capital, Brazil Private Capital, Citigroup venture capital, citigroup private equity, citigroup venture capital fund, private equity fund
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