GP Investimentos passes $1bn in booming Brazil

Triple-digit returns have helped the Sao Paulo-based firm reach a first close on what is for now Latin America’s largest private equity fund.

GP Investimentos, the Sao Paulo-based private equity firm, has announced a first close on its fourth private equity fund, reaching $1.025 billion (€744 million) in limited partner commitments.

The partners of GP Investimentos are themselves committing a whopping $400 million to the vehicle, with $625 million coming from limited partners.

The new fund, GP Capital Partners IV, is significantly larger than the firm’s third fund, which held a final close on $250 million last year. A source close to the fundraising said GP Investimentos’ LPs have been encouraged by “triple-digit” returns from the third fund. “Every deal is in total homerun territory”, the source added.  Among the major successes from that fund has been an investment in an operator of Brazilian malls, ECISA Group, together with Sam Zell’s Chicago-based Equity International.

For now, the billion-plus fund gives GP Investimentos control of the largest private equity vehicle in Latin America. Only a year ago, New York-based power-plant specialist Conduit Capital Partners seized the largest-fund mantel with a $393 million final close.

Other significant fundraising efforts in Latin America include a pan-regional vehicle from Advent International, which a source said was nearing a close on more than $1 billion. In addition, the private equity arm of Brazilian bank Patria is raising a significant new fund.

Private equity commitments have been flowing back into Brazilian funds as LPs become aware of improvements to the country’s investment environment, including a robust local IPO market, as well as an expected investment-grade rating from international rating agencies.

In a statement, co-chief executive of GP Investimentos, Antonio Bonchristiano, said:  “We are confident that there is a long way to go as the highly liquid market attracts institutional investors directing cash flow into private equity funds and we feel that we are well placed to capitalize on these opportunities.”

GP Investimentos was founded in 1993. Since an IPO last year, the firm has had a publicly traded parent affiliate on the Luxembourg exchange.