Darby closes Latin American fund

Washington, DC-based Darby Overseas Investments has closed a $175 million (€136 million) Latin American private equity fund.

Darby-BBVA Latin American Private Equity Fund will invest principally in Mexico, Brazil and the US Hispanic market. According to a statement, investors in this new vehicle included institutions from the US, Europe, Canada and Mexico; the fund was launched in partnership with Banco Bilbao Vizcaya Argentaria.

The new fund has already made a few investments, including a January acquisition of Laboratorios Kendrick, a manufacturer of generic drugs in Mexico. The fund also owns stakes in Satélite Distribuidora de Petróleo, a distributor of fuels and lubricants in northeastern Brazil, and Border Media Partners, a US Hispanic radio company operating along the US-Mexico border in Texas.

The new vehicle is Darby’s second general private equity fund focused on Latin America. The previous one, the $148 million (€115 million) Darby Emerging Markets Fund, is in exit mode. Darby also manages four additional funds in the region: a Latin American mezzanine fund, a Latin American technology venture fund and ProBanco, a financial services fund for Central America.

LP interest in Latin America has surged recently, according to figures compiled by Venture Equity Latin America. Latin America private equity funds drew roughly $1.02 billion in 2004. Funds targeting Brazil and Mexico drew roughly 60 percent of the total capital commitments, according to the statistics.

In February, for instance, Baring Latin America Partners announced that it had been selected by the Overseas Private Investment Corporation (OPIC) to manage a new private equity fund in Mexico. The OPIC board of directors approved $60 million (€45 million) in financing for the Baring Mexico Private Equity Fund II, which has a target of between $150 and $200 million.