Private Equity and Venture Capital in an Emerging Economy: Evidence from Brazil
Leonardo de Lima Ribeiro, Antonio Gledson de Carvalho, ClÃ¡udio Vilar Furtado
Abstract: This article, based on the Brazilian experience, examines how Private Equity and Venture Capital (PE&VC) adapts to an emerging economy. Our dataset is based on two extensive questionnaires answered by each of the 65 PE&VC organizations with offices in Brazil. The results reveal that the lack of infrastructure and safety creates investment opportunities. However, institutional idiosyncrasies represent a major barrier, and force the PE&VC industry â€“ based on an U.S. investment model â€“ to adapt through investments in different stages of business development, aversion to LBOs, generalist industry approaches, spatial concentration of the financial cluster and dependence on arbitration for solving disputes.