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AmericasSeptember 30 2007

Pension fund liberation to boost nascent sector

A relaxation of pension funds allocation rules in Latin America will hugely benefit regional private equity investment – but governments must keep better tallies of inflows, says Jason Mitchell in Buenos Aires.
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Even as developed market private equity suffers from the pain of the financial crisis, the Latin American private equity (PE) industry is taking off as Brazil, Mexico, Colombia and Peru make it easier for domestic pension funds to invest in the asset class.

According to the Emerging Markets Private Equity Association, Latam PE funds raised $1.35bn in the first half of 2007 and are set to beat last year’s total of $2.66bn with major funds having been raised in July. Brazil captured 82% of all private equity invested in the region last year. The peak year for PE investment in Latin America was 1998 at $3.7bn.

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