The financial turbulence around the world has opened a new window for the growth of private equity (PE) funds worldwide and in Brazil. They were already at full steam due to the pause in IPOs. Foreigners, especially purchasers of shares from Brazilian newcomers into the stock market, have no appetite for new investments. Added to this, is the fact that some recent offerings frustrated the market, stressing the need for companies to undergo a consistent preparation process for entry into the stock market. Now, with the crisis, the fewer credit offerings brought forth by the withdrawal of liquidity creates new possibilities for these investors.

“The credit won’t dry up, but will become scarcer and have tighter deadlines. In this scenario, private equity is a source of long-term resources, provided the company is prepared to receive that type of investment”, says Sidney Chameh, vice-president of the Brazilian Private Equity and Venture Capital Association (ABVCap). The association expects that, in 2008, the sector’s committed capital (the resources in store) will be similar to last year, when the number reached US$ 16 billion.

CRP partner, Clovis Meurer warns that the crisis, at the same time as it may encourage the choice of private equity, will also affect the growth of several companies. But his expectations are optimistic. CRP, as well as other managers in the sector, is in a phase of fund raising. Their eighth fund will invest in companies from a variety of sectors and with good corporate governance.