Advent ventures into Uruguay

By leading a consortium to acquire Nuevo Banco Comercial, Advent International has become the first private equity fund to invest in Uruguay since the late 1990s.

Adding to its collection of banking and finance institutions in Latin America, Advent International has signed an agreement to acquire Uruguay’s Nuevo Banco Comercial SA, Uruguay’s largest commercial bank.

In the $167 million (€135 million) transaction, Advent International co-invested with Morgan Stanley Alternative Investment Partners, Netherlands Development Finance Company, and Deutsche Investitions und Entwicklungsgesellschaft mbH.

Through this acquisition, Boston-based Advent International now becomes the first private equity fund manager to invest in Uruguay in over five years. The last time private equity funds closed on Uruguayan investments was in the late 1990s, when Citigroup Venture Capital International and The Exxel Group co-invested in Supermercados Devoto, a local supermarket chain. 

In Latin America, Advent International veers away from capital-intensive investments and instead pursues targets in the services industries, mainly in the financial services and business process services industries, according to Ernest Bachrach, chief executive of Advent International Latin America. Nuevo Banco Comercial is the second Latin American acquisition that Advent International has closed in 2005. 

Advent International’s first investment this year took place in early July, with the acquisition of Mexican mortgage lender Hipotecaria Casa Mexicana. Advent International has set aside $50 million for purchasing a majority stake in Hipotecaria Casa Mexicana and other local mortgage lenders that the private equity firm may later acquire for a regional roll-up play. Through the Mexican mortgage lender allocation, Advent International has fully committed the resources from its second Latin America-specific fund, the Latin American Private Equity Fund II (LAPEF II). 

Advent International is currently in the fund raising stage for LAPEF III, the firm’s third Latin America-focused fund. According to sources close to the fund, Advent International aims to raise $300 million for LAPEF III, and the firm is at liberty to begin committing resources from the new fund before holding a final close on the fund.