overview 2o census_brazilian_ind_pevc_2009_g_vcepe

Prof. Adalberto BrandãoCOO of [email protected]

Nov/2011Copyright @2011. Fundação Getúlio Vargas - GVcepe

Brazilian Private Equity and Venture Capital Industry

Second Census_2009

2

The Second Census Project

180PE&VC

Managing Organizations

144Surveyed

80%of industry

participants surveyed

Gather and interpret data to reflect the reality of the Brazilian PE&VC industry and its impact on the economy.

Copyright @2011. Fundação Getúlio Vargas - GVcepe Source:2nd Census of the Brazilian PE&VC Industry – ABDI/FGV

The Second Census Project

• 502 portfolio cos., Dec 09• 2005-2009 Period:

• 414 new investments• 103 total exits• 39 IPOs

Portfolio Companies

• US$ 36.1 bn Committed Capital• Main LPs: Pensions 22%, Parent Orgs.

18%, Endowments 10%, GP Orgs 9%, Family Offices 9%

Investors

• 144 PE&VC Firms• 258 Investment Vehicles• Est. 1,593 Professionals & Staff

General Partners

3

Industry Overview as of December 2009


4

Expansion of the Asset Class

2.3%

36

6

271.2%

13

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

0%

0.5%

Committed Capital as % of GDP

40

1%

Committed Capital allocated to Brazil (US$ Bn).

1.5%

2%

2.5%

The evolution of committed capital is impressive, increasing more than 6 times since 2004

and 2 fold as percentage of GDP.

2 x

2%

2 x

15% p.a

1%


5

Committed CapitalDecember 2009 (US$ MM)

Types Private Govt. Total %

Traditional * 27.168 935 28.103 78%

Corporate Venture ** 350 - 350 1%

Infrastructure *** 3.955 - 3.955 11%

Real Estate 2.734 - 2.734 8%

Timber 970 - 970 3%

Total 35.177 935 36.112 100%

* Investment vehicles with focus on manufacturing, trade, services, agriculture and traditional businesses.** Subsidiaries of industrial corporations.*** Investment vehicles dedicated exclusively to oil & gas, energy and self defined infrastructure funds.NOTE: Reductions refer to discontinued operations, termination of funds, allocation to Brazil changes and reductions of committed capital by investors.

Committed Capital Dec. 2008 28,984

Fundraising (Vehicles in US$) 3.093

Fundraising (Vehicles in R$) 2.979

Reductions (Vehicles in US$) -1.531

Reductions (Vehicles in R$) -732

Exchange Rate Effect 3.318

Committed Capital Dec. 09 36.112

Source:2nd Census of the Brazilian PE&VC IndustryCopyright @2011. Fundação Getúlio Vargas - GVcepe

7

Notes: Fundraising based on sample of 258 investment vehicles by 144 PE&VC Managing Organisations.Investment based on Sample of 394 and 95 Investments made by 144 and 45 PE&VC Managing Organisations in 2005-2008 and 2009 respectively.

Investment and Fundraising (US$ bn.)

Estimate of US$ 17.8 bn. of ”Dry Powder” ready to be invested as of December 2009


Infrastructure - otherExtractive Industries

Entertainment/TourismPharmaceutical/Medical/Aesthetics

IT and ElectronicsAgribusiness

CommunicationEducation

Energy and OilFinancial Services

RetailCivil Construction/Real Estate

Various Industries*Food and Beverages

1%2%2%

3%3%3%

4%4%4%

11%12%

13%14%

24%

8

Investments by Sectors of Economic Activity (US$ MM)

* Various Industries: E.g.: Chemicals, Mechanic, Electric, Metallurgic, Packaging, Textiles.** Various Services: E.g.: Call Center, Consulting.Sample 2005-2008: 394 investments by 144 PE&VC Orgs.

Sample 2009: 95 investments by 45 PE&VC Orgs.

2005-2008 (Includes New and Follow-on Investments)


Civil Construction/Real EstateIT and Electronics

Various Industries*Retail

Food and Beverages

Pharmaceutical/Medical/Aesthetics

Various Services**Infrastructure - other

AgribusinessEducation

Transportation and Logistics Services

Extractive IndustriesEntertainment/Tourism

Financial Services

Energy and Oil

1%

1%

1%

1%

3%

5%

5%

6%

9%

10%

54%

1%

1%

2%

2%

4%

6%

7%

8%

11%

14%

39%

Including all investments

Excluding one US$ 0.765bn investment in energy transmission

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Investments by Sectors of Economic Activity (US$ MM)

* Various Industries: E.g.: Chemicals, Mechanic, Electric, Metallurgic, Packaging, Textiles.** Various Services: E.g.: Call Center, Consulting.

2009 (Includes New and Follow-on Investments)

Sample 2005-2008: 394 investments by 144 PE/VC Orgs.Sample 2009: 95 investments by 45 PE&VC Orgs.


10Copyright @2011. Fundação Getúlio Vargas - GVcepe Source:2nd Census of the Brazilian PE&VC Industry – ABDI/FGV

Number of Investments by Sectors of Economic Activity

CommunicationInfrastructure - other

Food and BeveragesExtractive Industries

EducationCivil Construction/Real Estate

Entertainment/TourismFinancial Services

RetailBiotechnology

Transportation and Logistics ServicesVarious Services**Various Industries*

AgribusinessPharmaceutical/Medical/Aesthetics

Energy and OilIT and Electronics

1%

2%

2%

3%

4%

4%

4%

4%

5%

6%

6%

7%

8%

11%15%

15%

1%

3%

8%

9%

11%

14%

18%

20092005-2008

2005-2008 vs. 2009 (Includes New and Follow-on Investments)

Sample 2005-2008: 394 investmentsSample 2009: 95 investments

* Various Industries: E.g.: Chemicals, Mechanicals, Electric, Metallurgic, Packaging, Textiles.** Various Services: E.g.: Call Center, Consulting.

Investments by Stage and Type 2009

41%

31%

15%

5%4% 3% 1%

Private EquityVenture CapitalSeed/Start-upGreenfieldMezaninoPIPEDistressed

Stage Average TicketSeed/Start-up 0.42Venture Capital 4.41Greenfield 46.64Mezzanine 50.22Distressed 64.37Private Equity 73.41PIPE 91.77Total 39.39

Number of Investments(Includes New and Follow-on Investments)

Average Ticket(US$ MM)

Sample: 77 investmentsSample: 95 investments

Copyright @2011. Fundação Getúlio Vargas - GVcepe Source:2nd Census of the Brazilian PE&VC Industry – ABDI/FGV 11

95 and be-fore

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 200905

101520253035404550

7

1

7

3

79

11 108 7

13

31

37

47

19

12

New Investment Vehicles Raised

30 to 50 new investment vehicles raised p.a. since 2008, vigorous entry and expansion in the industry.

Sample: 215 Investment Vehicles reported by 120 PE/VC Orgs.


Portfolio Companies By Sector of Economic Activity 2009


Sector No. of Companies % Cumulative %IT and Electronics 103 20.5% 20.5%Civil Construction/Real Estate 69 13.7% 34.3%Energy and Oil 56 11.2% 45.4%Various Industries 55 11.0% 56.4%Communications 33 6.6% 62.9%Retail 26 5.2% 68.1%Agribusiness 25 5.0% 73.1%Transportation and Logistics Services 20 4.0% 77.1%Food and Beverages 19 3.8% 80.9%Infrastructure - other 19 3.8% 84.7%Financial Services 16 3.2% 87.8%

Pharmaceuticals, Medicals and Aesthetics 15 3.0% 90.8%

Biotechnology 14 2.8% 93.6%Various Services 10 2.0% 95.6%Education 8 1.6% 97.2%Entertainment / Tourism 7 1.4% 98.6%Extractive Industries 7 1.4% 100.0%Total 502 100.0%

Sample of 502 companies in 2009.* Various Industries: E.g.: Chemicals, Mechanicals, Electric, Metallurgic, Packaging, Textiles.** Various Services: E.g.: Call Center, Consulting.

Distressed

Greenfield

Mezzanine

VC - Later stage

PIPE

PE - Later Stage

Seed

Start-up

VC - Early Stage

PE - Growth

0.2%

1.6%

2.1%

5.0%

6.2%

6.9%

7.6%

13.1%

20.9%

36.5%

Frequency of Portfolio Companies by Stage 2009


Sample: 436 companies in 2009 .

Overview

VC 47.0%

PE Growth 36.5%

PE Later Stage 6.9%

Other 10.1%


Closing the Gap: Potential for PE/VC investment in innovative opportunities

Incubators and Tech ParksPE/VC Portfolio Companies

Geographic Distribution

16

Exits & Divestitures

NOTE: the sample contains 151 divestitures (107 total & 44 partial) from 2005 to 2008 & 37 divestitures (30 total & 7 partial) in 2009 with information about the exit mechanism.

2005 2006 2007 2008 20090

10

20

30

40

50

60

70

8

17 19

1 4

6

12 10

16 10

4

612

27

115

4

3

15

81

3

4

2

4

Write-off

Buyback

Trade Sale

Secondary Sale

IPO

24

42

48

61

37

Divestitures 2005 - 2009 (Including Total & Partial)

Source:2nd Census of the Brazilian PE&VC Industry – ABDI/FGVCopyright @2011. Fundação Getúlio Vargas - GVcepe

17

Contact

Source:2nd Census of the Brazilian PE&VC Industry – ABDI/FGVCopyright @2011. Fundação Getúlio Vargas - GVcepe

Prof. Cláudio Vilar Furtado Prof. Adalberto BrandãoExecutive Director [email protected]@fgv.br+55 11 3799-7768 +55 11 3799-7768

+55 11 8313-0453

www.fgv.br/cepefacebook.com/FGVcepe

Twitter: @GVcepe

18Copyright @2011. Fundação Getúlio Vargas - GVcepe

Thanks for your attention

overview 2o census_brazilian_ind_pevc_2009_g_vcepe

Economy & Finance