Panel session: Spotlight on the Andes – why investors are flocking to Chile, Colombia and Peru
Phillip Bass, Global Markets Leader, Private Equity, Ernst & Young
Hector Cateriano, Managing Director, Access SEAF
Daniel Wasserman, Partner, Aureos Latin America
Eduardo Elejalde, President, LAEFM Colombia
Julio Romani, Chief Investment Officer, Invita Seguros de Vida y Pensiones
Philip introduced the session that Brazil was getting the best attention, however now greater Latin America exclusive of Brazil, Brazil number two and China number three markets for PE. Specific sector trends and how that applies to sector trends and portfolio companies and how they create value.
Hector believes that the excitement on mainly Colombia and Peru is that there are a lot of changes and changes in security. Colombia in 2000 was a different country and those security concerns are being solved today along with liquidity is helping it grow fast. There is a huge amount of faith in Colombia right now. It creates a circle of virtuosity. Now is the best time to invest.
Daniel: Colombia can surpass Argentina with 60-70% increase over the past few years. Which has created new spaces in retail and entertainment. It’s important to also have local presence with people on the ground doing that for you. We’re at earlier stages in the investment cycle in PE and they will see a lot of exits in the next few years.
Eduardo: Mexico, Colombia, Peru, and Chile have new reasonable economic policies, especially Colombia. It is the only LatAm country that did not default during the Latin American debt crisis of the 80′s. Now that the country has more security, there is more opportunity in hydrocarbons and other industries which are growing. Chile today is more expensive and less risky with a new class that is investing in Colombia. Eduardo also shared the emergence of “H.E.N.R.Y.’s,” High Earners, Not Rich Yet who are contributing the the region’s incredible growth.
Julio: Peru is the new kid on the block. Peru has legal and economic stability, there have been 4 governments in the past 20 years that have been maintaining the same political framework. Average 5-6% GDP growth per year in the last 20 years. In the last 10 years inflation has been only 2.5%. At this moment the Peruvian debt is 20% of GDP. They have also changed half the debt from USD to local Peruvian Soles. Peru is exporting 6X what it was exporting 10 years ago.