IIF Sees Moderate Growth Deceleration

New data from the Institute of International Finance (IIF) predicts a moderate slowdown in growth across the board in LatAm through 2009. Regional expansion is forecast to ease to 4.4% in 4.1%, respectively, in 2008 and 2009, from 5.3% last year. This includes a decline this year to 2.7% in Mexico (versus 3.2% in 2007) and 4.6% Brazilian growth, from 5.4% last year. However, the IIF foresees a pickup in Mexico to 3.5% next year. Peru is set to fall from 8.5% in 2007 to 6.5% and 6.0% in the next few years, while the corresponding figures for Argentina are 8.7%, 6.8% and 4.2%, and for Colombia 7.1%, 5.1% and 4.5%. Inflation is meanwhile set to hit 6.4% this year, up from 6.0% in 2007 and 4.8% in 2006, says the IIF. It expects monetary policy to hold or tighten in coming months in Brazil, Chile, Colombia and Peru. Mexico meanwhile looks set to ease in the second half. “Most of the countries have shown solid growth in their economic activities and most of it comes from the domestic demand. Investors are optimistic,” says Carola Sandy, analyst at Credit Suisse.

DLJ Raises $300m for South America PE

DLJ South American Partners has started allocating from a new $300m private equity fund. The firm’s main principals, Buenos Aires-based Carlos Garcia and Marcelo Medeiros in Sao Paulo, are heading the effort and have already spent $82m across three deals. “Capital markets liquidity has dried up recently in Latin America and we believe that enhances our opportunities to identify investments going forward,” Garcia tells LatinFinance. The firm will employ various strategies, including buyout and growth capital, across all sectors. It will look to take controlling stakes in companies in order to gain greater influence over management and the exit strategy, says Garcia. The executive declines to specify by when he expects the $300m to be spent, though he speculates that given the number of opportunities, it may be a lot sooner than the fund’s mandated 5-year horizon. DLJ has invested in LatAm for several years from its global fund, but this is its first dedicated vehicle. DLJ South America Partners is a joint venture between Credit Suisse and the management team that was set up in late 2006 to target deals in South America. Since then, the entity’s three deals have been: Arcos Dorados, the LatAm McDonald’s business; Fispal, a food and beverage trade show promoter, of which it acquired 100%; and EBEC, an educational company in Brazil. DLJ joins a number of other PE shops raising new funds for the region, including Advent International and the Carlyle Group.