HIG Capital LLC, the Miami-based private-equity company, is completing its first deals in Brazil with the purchase of stakes in two mid-sized consumer and industrial firms, said Latin America chief Fernando Oliveira.
“We want to establish a significant position in this segment that is often overlooked by larger private-equity companies,” Oliveira, who was hired in February, said in an interview this week, declining to provide more details about the acquisitions because negotiations are private. HIG has at least 20 ideas for investing in mid-sized Brazilian firms, he said.
Private-equity companies are betting on Brazil to take advantage of the world’s second-biggest developing economy after China. Morgan Stanley Global Private Equity announced a partnership yesterday with Sao Paulo-based OSF Merchant Banking to pursue investments in Brazil. Carlyle Group LP (CG), which raised $1 billion in June to invest in South America, has joined with TPG Capital to open offices in the country.
Oliveira said HIG plans to hire as many as 15 people by the end of this year as he seeks to invest in companies with 5 million reais ($2.7 million) to 100 million reais of earnings before interest, taxes, depreciation and amortization. Each investment will be between $5 million and $100 million, he said.
Oliveira this month hired Marcelo Cecchetto from Icatu Holding SA and Rodrigo Azevedo from Dynamo Administracao de Recursos, a Rio de Janeiro-based asset-management firm. He said that he’s recruiting two more investment executives and will continue adding people to HIG’s team in Brazil this year.
HIG is the first foreign private-equity company to set up shop in Rio, according to Oliveira. Brazil’s second-biggest city will host the 2016 Summer Olympics and is home to the Maracana soccer stadium, where the closing ceremony of the 2014 World Cup will be held. These events are generating demand for investment in services and infrastructure, Oliveira said.
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