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Advent says currency hedge key to LatAm dealsPosted by Retirement on: 2005-09-16 12:40:32 in category:
Investments [ Print | Permalink / 0 Comment(s) ] NEW YORK (Reuters) - Investing in Latin America comes with plenty of challenges, but with the right currency bet and with local talent on the ground, making money there can be a cinch, David Mussafer, managing director of private equity firm Advent International, said on Friday. "We look for assets that have less currency risk, and you need to buy at a very attractive multiple," Mussafer said at the Reuters Hedge Funds Summit. Many buyout firms will not touch Latin America because of the region's political unrest, currency fluctuations and infrastructure challenges. But Advent is one of the few private equity shops attracted to the area, not repulsed. Mussafer said private players who have lost their shirts in Latin America -- and there are many -- saw value in companies with multiples of six or seven times earnings, when there were ample opportunities in companies trading at four times earnings. "People went down there and said everything is on sale," he said. "A lot of the trouble was in minority deals. We said we'll only do control deals because we can take the operational step further." The Advent managers involved in the Latin American deals are physically in place at the companies, managing the business, a concept other investors have not embraced, Mussafer said. "It's not a startling concept. You can't manage a company you bought in Chicago from your New York office," he said at the summit, held at Reuters U.S. headquarters in New York. Aside from on-the-ground management, placing the right currency bet is also key to Advent's strategy, particularly in Latin America, where currency values can fluctuate dramatically. Advent has invested in companies with less of that risk, such as Dufry Group, the world's No. 4 duty-free retailer, based in Mexico, and DolEx Dollar Express, an electronic money transfer firm also based in Mexico. "Latin America is a very challenging place to invest. We are not saying it is easy by any stretch. But a lot of the challenges are operational," Mussafer said. Advent also has portfolio companies in Brazil and Argentina. On Tuesday, Boston-based Advent agreed to acquire Nuevo Banco Comercial S.A., Uruguay's largest commercial bank, from the Uruguayan government for $167 million. Homepage Please support are sponsors. To design you custom retirement plan. http://www.retirement-plan.us For planing a IRA rollovers. http://www.ira-rollover.us Professional asset allocation and the wonders it can do. http://www.asset-allocation.us Professional money management: National ranked performance. http://www.roth-ira.us Managers selected to fit your needs. http://www.money-managers.us |
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