Gavea Targets Public Equity for PE Fund

Brazil’s Gavea Investimentos will in its third $1.2bn PE fund continue to participate in privately arranged deals that involve taking equity stakes in public, or soon to be public companies, Arminio Fraga, the asset manager’s founder, tells LatinFinance. Aside from its usual strategy – illiquid investments in growing, privately held companies that are still a ways from being ready for an IPO – Gavea will look at privately marketed deals from more mature entities, or even outright market purchases to generate returns. “There are many more opportunities now in the private market. There are lots of [companies] trying to raise capital now,” says Fraga, referring to difficult public equity market conditions. The former central bank president notes that Gavea’s last fund made several purchases of pre-IPO notes. These include Bovespa, Magnesita, OGX – which sold $1bn in equity 6 months prior to IPO – and Aracruz.